Money, Money, Money

Okay sorry for the INCREDIBLY corny title. Not my finest or my most creative title at all. But this blog I have put together centres on money, budgeting, and setting up your finances to work and function so you can enjoy life but also save some cashola. You may be saving for a holiday, a new family car, to further your study, or a home. Whatever you want to save for, we found the main principles and strategies to be the same, and they all come down to habits. I’ve broken this blog into our top money management and saving tips. We came up with these strategies and tips through personal experience, seeking advice from family, and most importantly finding a pattern of saving that suits us, even if it might not suit everyone else.

Move money into accounts at the start of your pay cycle, not at the end.

This is probably the most important thing we do every single pay cycle to ensure the correct amount of money is put aside for each of our bank accounts. During the same day we get paid, we move our money. We put aside a certain amount for groceries, for our rent and bills, our savings, and our own personal spendings. This means lump sums don’t sit in one account and get burnt through. We found in particular for saving, if the money isn’t set aside when you get paid, it is very hard to find it at the end of the pay cycle to save it then. Save it at the start and treat it more like a set and forget. My husband and I bank with the same bank and share the accounts which also makes moving the money easier.

Find bank institutions and accounts that earn you good interest.

This one is particularly important for your savings account. Find a bank that will give you a good return on your main savings accounts. We shopped around a bit for ours but are super happy with who we bank with because we get rewarded for the money we do save. Look for things like bonus credit interest when you deposit over a certain amount into the accounts as this will boost your savings over time.

Be consistent.

We have always said that it isn’t necessarily the figure you save each pay cycle that is important but keeping it the same amount or percentage really helps it to not become stagnant or drop. We go by a dollar amount each pay cycle, and we stick to just one of us putting into savings so that person can put in a higher amount as they aren’t paying for the groceries or bills. ‘One person saves, one person spends’ kind of mentality. Even if your family saves just 10-20% of one person’s wage, that’s better than not saving at all or having really irregular saving patterns. You can always increase what you save incrementally once you get into the habit.

Use your tax return wisely.

If you get a tax return, plan how you will use it. We have used tax returns to pay off a car, put towards a holiday, boost our savings account and purchase a furniture/appliance piece for the house. It is easy to think FREE MONEYYYYYY and just let it burn away in your spendings account and be spent on things you could probably cover in your wage anyway. There is of course nothing wrong with doing something fun with it, but if it can pay a bill or debt off and give you some peace of mind, it’s a valuable habit to get into.

Always be updating your budget plan.

This is particularly important if you get a new job or go on leave, or a situation comes up where your current financial patterns will change. If you are in a relationship and share bank accounts, we recommend sitting down and putting time aside to map out your new salary and pay cycles and updating how much money will be going into your accounts before you begin the new arrangements. Sometimes you will also come up with a budget plan that works in theory but is hard or impossible to stick by practicality. If you’re finding you are falling short in a particular bank account per fortnight or month, go back to the drawing table and strategize how you can fiddle with the amounts going into each account. For example, you may find that your grocery account is always $20-$30 short each fortnight. See if you can find that amount in another account which you don’t mind forfeiting from such as your own spending account.

Don’t get a credit card!

I know what you’re thinking. It’s so good for your credit rating! It’s great for emergencies! But my account comes with a credit card! I have a job so I can afford a credit card!

To these points I will say this: a credit rating is not the be all and end all. If you are buying a home, a bank will more likely take a close look at your potential savings deposit and your salaries over your credit rating. And if you’re not being careful with your credit card and not squaring it up after every single purchase and letting a debt accrue, your credit rating won’t be that spectacular anyway. Just sayin!

For the emergency point, if you are budgeting consistently and building your finances carefully and consistently, its highly likely you won’t go without. Have we had to dip into our savings in the past for a bill that was bigger than we thought? Yes! But we would prefer to do that and recoup the amount during the next pay cycle than put it on a credit card where we automatically then go into debt over it. Recouping your own cash is far easier than paying off debt where you always feel behind.

Don’t sign up for an account with a credit card! If they try to ‘sell you’ on getting the credit card that goes with the account be firm in declining. I don’t know if this is truly a thing but if I had no choice but to take it, I would actually just go and find another bank where is wasn’t compulsory. I don’t think a credit card should ever be a compulsory thing to accept or push on a customer.

Just because you work a good job, doesn’t mean a credit card is the wise choice for you. Even if you can ‘afford’ it. Affording and managing a credit card are two very separate things. If you don’t manage it correctly, it’s a big financial trap. If you can’t afford something with the cash you have at the time, don’t buy it.

I don’t mean to shame anyone with a credit card! I apologize if my advice has come across that way or sounds condescending. Its an area I feel very passionate about given my mood towards credit cards! If you have a credit card and it works for you and your family, by all means continue to work it into your budget plan. But if you are finding it has become more of a burden than a blessing, seek guidance to pay it off and cut that bad boy up. We had one for awhile early in our marriage but we found it just didn’t work for us. I know how much more financially free it made us feel when it was out of our lives.

Avoid Afterpay and be wise with your direct debits.

Direct debits are a bit tougher to avoid, for example our rent and certain bills are direct debited. So that I get. But I’m talking keep other memberships down to a minimum (gyms, subscriptions etc). My advice would be make sure it’s a viable direct debit before you sign up.

As far as Afterpay or any ‘buy now pay later’ deal goes, I would just say don’t do it. Loans for homes or big-ticket items I totally get, but I think it’s unnecessary for everyday items. It may seem reasonable. It may seem like it’s a good way to save and budget your money, but it is a trap and they pile up quickly. If something seems too good to be true, a lot of the time it is. Again, if you can’t afford something at the time, wait and save up for the item so you can just pay in full with cash.

Our last tip: run your own race.

Don’t try to keep up with the Joneses. I understand the feelings when you see your friends buy homes or go on holidays and you feel like you don’t have two coins to rub together. If you are living within your means and being consistent with your budgeting, you will achieve your big and small financial goals though at your own pace. Everyone has a different path and that is okay!

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