Four Steps to a Brighter Financial Future
If you’re like most people, you know it’s hard to get your finances in order. Whether you’re putting off dealing with it or delaying bills, here’s a few tips to help get back on track for your future.
Facing your finances can be daunting, there’s no doubt about it. The result that comes from it, however, is peace of mind and being aware of exactly what is happening with your money is the end goal. Below are a few simple steps for you, that we’ve laid out to assist the process.
1) Plan!
It might sound simple and underwhelming, but it is key in the long run. Many people make a start in one part of it, whether it’s a saving plan or looking at their bills or outgoings in one area but miss others. Looking at all of your income and expenses for the month is a good place to start. Then, extent that to the year. Yes, things change, but having a plan gives you a starting point from which you can react to the changes down the track.
2) Make and stick to… a budget
This it quite often the most difficult piece of the puzzle. On the surface, most people can see and understand that if you spend less than you earn, you’ll likely save money. In practice however, thanks to us being human, this is more difficult. When we see things we want, things we need and all the other options for consumption thrown in front of our faces through advertising, saying no isn’t easy.
The aim of the budget is to work out what you are currently spending and what you want to spend, or need to spend, to meet your goals. If you’re already spending less, great! If not, probably like most people, you might need to look at cutting out some spending.
Allocate certain amounts to areas like going out, buying lunch, your basic needs, subscriptions and the rest. Then, track against these. By breaking it down into bite sized chunks, you can see where you’re under (or over) spending. There are great apps out there that can assist like PocketBook.
Another great way to help is by getting your pay split to separate accounts, one for savings and one for spending. Having all of your recurring outgoing from one account can help your budgeting!
3) Insurance
Not a sexy word, but it can help when things go pear-shaped. There are many types of insurance, but in terms of budgets, income insurance comes to mind. If something happens to you, an accident physically, mentally or even things like redundancy, knowing you have insurance in place to maintain your income is reassuring.
Normally, when discussing budgeting, it is overlooked that income is half of the equation. Yes, managing outgoing is the issue for many, but maintaining income is required for the rest of the budget planning to be successful.
Thinking nothing will happen to you is a common fault made by many. It’s easy to think, until something does.
4) Invest in yourself!
Also often disregarded, the value of building some knowledge of the financial world yourself goes a long way. Yes, other people like Addept Wealth exist to do most of the heavy lifting with your finances, however knowing the basics of investing, especially superannuation, shares, term deposits and similar vessels pays off. It makes you more informed and able to understand and discuss situations at a higher level, giving a better outcome.
5) Start!
Here’s a bonus for you. You might have heard the quote “The best time to plant a tree was 20 years ago, the second best time is now.” This is true not only in the realm of arborists, but also in your financial life. By taking control of your finances now, and even starting to invest now, you’re making positive steps towards a positive outcome in the end.
Yes, you could’ve started earlier and some people let this bring them down. Don’t dwell on the past; the best thing to do is start now.