Reason #1: You spend more than you make Problem: Chances are that if you live in Australia, you live in one of the most expensive cities in the world – petrol, rent, groceries and fine dining now come with astronomically high price tags, and Aussies like to live above their means. Solution: Budget like you’re working with 100% cash, and no credit. What’s do-able? What’s not? Where can you cut? It’s all about adjustment and being strict with yourself! Reason #2: You don’t pay yourself first Problem: And so the rule goes: you should be saving at least 20% of your pay. But how is this possible when there’s nothing left at the end of the pay cycle? Solution: Try setting up an automatic direct debit immediately after your paycheck hits your account. Reason #3: You pay too much in rent or mortgage repayments Problem: The allure of a modern home with the latest in Danish amenities, having a bigger bedroom or living in that one postcode over might be the reason you’re not getting on top. Solution: Review what’s really affordable before you commit to weekly repayments. Consider moving in with friends to share the rental load. Reason #4: You don’t realise the little things add up Problem: Is a morning walk to the nearest coffee place a familiar routine? Buying lunch every day? Choosing an entrée, dinner and dessert? These little decisions add up and can equate to a few hundred dollars difference at the end of the month. Solution: A word to the wise: be wary of the incidentals, and keep track! Reason #5: You think you’ll save more when you earn more Problem: This common belief is, more often than not, untrue. Typically, people spend equal to or more than what they earn. Solution: Budget for bills, give yourself an allowance and you’ll find yourself pocketing the rest for a rainy day. Reason #6: You don’t keep track Problem: So, you don’t want to be one of those ‘money types’, keeping track of every dollar and cent that comes and goes. But what’s the difference between ‘them’ and ‘you’? Savings! Solution: Put time aside to work through your financial activity with the use of a spreadsheet. Reason #7: You don’t pay attention to your super, or your investments Problem: It’s smart advice: from your early 20s, everyone should consider starting an investment portfolio. But wait; doesn’t this seem like something reserved for your parents? Or perhaps you just don’t earn enough? Solution: Think again. The amount you start with neednt be more than the money in your purse right now. Reason #8: You love online shopping Problem: In this day and age, a simple click of the finger means we can have goods delivered to our doorstep in a matter of hours. The internet is a 24/7 portal to spend. Solution: Ensure you track your purchases and try to avoid the impulse! Reason #9: You’re a ‘say yes’ person Problem: You’re the quintessential social butterfly, saying yes to any and all plans that come your way. Solution: It’s not so much about limiting the acceptance of invitations as much as it is limiting your spending on the night. Commit to having a good time on a shoestring. Reason #10: You drive everywhere Problem: In Australia, thanks to a driving culture and less-than-perfect public transport, many of us fall into the trap of using our cars far too often and petrol, tolls and car service bills can add up fast. Solution: Once a week, try the bus or train, or even walk. Reason #11: You book holidays you can’t afford Problem: Australia’s distant proximity to other lands instills a yearning to travel far and wide. Solution: The next time you book a holiday, think about how much you need to save before committing to buying flights on credit or selling your shoe collection for spending money. Reason #12: You deserve the finer things in life Problem: Weekly manicures, personal training, hair blow-waves, spa treatments and more. Whilst the luxuries seem necessary, they can blow out your budget faster than you can heat a curling iron. Solution: Choose to indulge in these finer things when you’ve ‘earned’ them – a reward for a great month at work, for example. Reason #13: You have kids Problem: Having children is one of life’s true blessings, and whilst they give back so much, it cannot be denied that kids are expensive. Family holidays, schooling, clothing, birthday parties, food and fun combine to a hefty total on the annual bill. Solution: Try to be creative with play dates, holidays and general activities. Using your imagination; going camping or spending a day doing craft can be fun and free. Reason #14: Everyone you know is getting engaged/married/having a baby Problem: Your 20s and 30s are a wonderful time filled with friends, fun and celebration. It’s also a time when it seems your entire social circle is getting engaged, married or having babies, implying that you need to spend on gifts, remote-wedding hotels and silver rattles. Solution: Try contributing to a larger gift with friends, or finding something to gift that is thoughtful, rather than flashy and expensive. Reason #15: Peer pressure Problem: That high-flying exec friend can afford the latest pair of red-soled Louboutins. This doesn’t mean that you should be pulling out all the credit-card stops to have them, too. Solution: Stick to your budget and avoid the pressure. Reason #16: The future seems unattainable, so you spend anyway Problem: Buying an apartment, house or new car in this day and age seems increasingly unattainable. Don’t fall into the trap of thinking, then, that there’s no point to saving. Solution: Put little bits away at a time, and you’ll be pleasantly surprised. Reason #17: You’re keeping up appearances Problem: Keeping up with the Joneses has never been so expensive! We live in an age of ‘bigger is better’, but the reality is that few of us can afford to live this way. Solution: Don’t compare – know that your five-year-old car still gets you from A to B perfectly. Reason #18: You don’t have defined goals Problem: Goals keep us on track, focused and hungry for success (this includes financial goals too), and the issue is, you don’t have any. Solution: Set goals (and deadlines too), no matter how big or small. Save for something you want or need – a handbag, a car or a house deposit. Reason #19: You spend your emotions Problem: When we’re stressed or anxious, we tend to put an emphasis on the things we can control such as eating and spending. To alleviate, we indulge, often without thinking. Solution: Try a more measured approach to your spending and avoid the buyer’s remorse! Reason #20: You don’t pay attention to the financial fine print Problem: Chances are, most of us are with the same financial institutions we’ve had for years. Bank accounts charge all sorts of interest rates and fees that might be avoidable at a closer look. Solution: Question the fine print and don’t be afraid to shop around.
Posted on: Tue, 11 Mar 2014 06:41:32 +0000
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