So, the sparklers have sparkled and the champagne glasses are now empty.
The ball is rolling on 2021 and it’s time to start afresh and get financially fit for the year ahead.
Disclaimer: These tips are relevant all year round, however in the spirit of starting a fresh new year we thought we’d share them now. If you’re reading this in October, or even 2023 the principles still apply. It’s never too late to take charge and make the most of your money.
If you’d prefer to digest the tips in an audio medium, save your eyes from reading and tune into episode 13 of The We Talk Cents podcast instead.
Put your best foot forward for 2021 and take a look at these tips to get ahead.
The best thing you can do for yourself is to learn, so start by building your knowledge. Rather than just digesting information you see online, take the time to read a book and really get to the root of understanding a topic that you’re passionate about. If you’re interested in money or want to learn about finances, choose a trusted book to dig into. Arm yourself with as much knowledge as you can to get ahead. Future you will thank you for it.
This may seem fairly straightforward, but monitoring your subscriptions should be a habit you adopt and attempt at least once per year. Take the time to go through your bank statements and notice all of the membership fees and/or subscription fees you have coming out. If you’re like me and have been caught with multiple subscriptions you didn’t even know about, actively take the steps required to prevent losing more money. It’s also a good time to reassess whether you are getting value for money. If you’re paying a subscription for something you aren’t using regularly, it’s time to check in and see if you really need it. Cancelling excess subscriptions can lead to more money in your pocket and will help you declutter your life. If you’ve got too many subscriptions and you are feeling overwhelmed there is another solution to cancelling subscriptions.
Now, hold your horses for just a tick — maybe cancelling your card may seem a little drastic. Cancelling your card will prevent any further payments from coming out unnecessarily, and once cancelled you’ll be able to reconnect the payments that you want to keep. Be sure to remember to cancel your unwanted memberships and subscriptions after you’ve cancelled your card. It’s important to also check the T&C’s of each subscription service you have, as you wouldn’t want to be hit with any late payment fee’s or dishonour fees if you decide to take this route. Once the purge is complete, you can order a new card from your financial institution to replace it.
Are you taking full advantage of membership perks and the benefits you have access to? Many bank accounts will offer bonus interest rates on your savings account if you meet a certain criteria. Often, the requirements are as simple as depositing a certain amount into your savings each month, or making a number of purchases using your transaction account. Bonus interest is a super easy way to make extra money so doing the research and making sure you’re maximising your bank’s benefits are a great place to start.
Membership perks extend beyond who you bank with. It’s likely that you’re a member of several other benefits programs without even realising it! Telstra, Optus and Virgin mobile as well as many other telecommunication service providers offer a number of perks and rewards to their members. Roadside assistance and insurance companies also often offer great rewards and discounts to their members.
Here’s a small example of the types of rewards you may be entitled to through your roadside assistance or phone provider:
If you’re entitled to a discount or reward, you may as well use it and save yourself some extra dosh. To find out more, let google be your best friend. Simply search “company name” + membership perks.
You’ve got skills unique to you, so why not use them to generate some bonus income? Starting a side hustle can be a fun way to exercise a hobby, pursue a passion of yours all the while bringing in more income. Starting a side hustle also helps to diversify your income streams which goes hand in hand with the old saying, don’t put all of your eggs into one basket.
An old favourite and easy way to start a side hustle is by selling items you already have sitting around the home. Get inspired to sell items with a easy how-to here.
We are big fans of treating yourself. If you’ve worked hard, you deserve a pat on the back, however be wary of falling into the trap of rewarding yourself by spending money. Working overtime or making extra cash with a side hustle shouldn’t be used as an excuse to start flinging your cash around. Instead, think of cost-effective (or even better, free!) ways to celebrate your wins and treat yourself. #Selfcare doesn’t have to be an overpriced bath bomb or shouting the whole office a round of after work drinks.
Let your creativity shine and look to reward yourself in new, cost effective ways. Why not take yourself to the beach for a sunset swim, enjoy a free dancing lesson or settle down with your favourite snack and watch a movie at home?
If you’re hell-bent on spending the extra money you make, you could try setting yourself a limit. For example, for any extra cash you come into perhaps you allow yourself to spend 20% of it, and the remaining 80% goes towards paying off debt, investing or savings.
It’s your money so find a method of #treatingyourself that works for you.
Whip out your sharpie and mark your calendar, it’s time to bring in No- Spend Days (NSD’s.)
This rule is pretty straightforward, you simply don’t spend any money on the days that you’ve allocated as NSD’S. To start, pick 1-2 days that you will commit to each and every week to not spending a single cent on. (Direct debits and bills are okay to pay on these days as the aim is to reduce discretionary spending.) Commiting to 1 or more NSD’s per week is a great way to reduce mindless spending. You’ll also be forced to get creative when it comes time to feed and entertain yourself. Choosing a day and sticking to it will put you in good stead for creating strong money habits. Good habits are the foundation for behavioural change, so we say, bring it on!
Unless you’ve recently time travelled from the middle ages, it’s likely that you’ve got a phone bill. It’s also pretty likely that you’re paying too much for it. When was the last time you compared your phone plan with the rest of the market? The telecommunications market is super competitive and service providers are often coming out with great new products to offer more value to their customers. Shop around and see if you can find a plan with better value for your needs. Saving $10 per month off each bill may seem insignificant now, however that can easily add up.
In fact, to prove how worthwhile saving an amount as small as $10 per month is, we’ve done the maths for you.
Imagine you pay $40 for your phone each month, and you switch to a provider to pay $30 per month. You will save $10 per month or $120 per year. If you were to take that $10 you save each and every month and decide to invest it, assuming you were to receive a conservative average return of 7% compounding interest each year, after 3 years your $360 investment could have made you $39 in interest alone.
If you kept this up for 10 years you’d have $1731. A whopping $531 of that would be the results of compound interest.
With all that considered, saving $10 per month of your phone bill seems like a no brainer, huh!
A popular proverb in the investing community is “The best time to plant a tree was 20 years ago. The second best time is now.” This chinese proverb is true of investing as well.
Time is one of the major factors that can impact stocks.Get educated, do your research and start investing.
If Warren Buffet (considered one of the most successful investors in the world) had started investing in his thirties, rather than in his teens, he would have been a multi-millionaire rather than the billionaire that he is today. Time combined with the magic of compounding interest has amplified his investing results. Utilise the power of compound interest to your benefit. It’s never too late to start investing, but the longer you leave starting to invest means the less likely you are to reap the rewards of compounding interest. If you’re looking to start out be sure to do your research. Investing can be confusing and overwhelming at times however there are plenty of resources to help set you out on the right path. Micro-investing platforms such as Raiz or Spaceship can be a great introduction into the world of investing.
Deleting items in your online cart and deciding to cook instead of ordering uber eats is all well and dandy if you’re trying to save money, however If you’re letting that money sit in your account to be spent at a later date, can it really be considered ‘saving’?
Practice the smart money habit of saving the money you don’t spend. Watched a movie at home instead of going to the cinema? Transfer the money you would have spent out, into your savings. You can even label the bank transfer as what you would have spent the money on to see the impact of your spending restraint with your very own eyes.
Didn’t buy a new outfit for an upcoming event? Transfer that $50 to your savings.
Cooked breakfast at home on the weekend? Transfer your $22 and label it ‘smashed avo’ into your savings. Rode your bike instead of ordering an Uber? That’s another $15 straight to your savings.
Naming and labeling your savings is so satisfying, and you’d be surprised to see how fast it grows. This habit will help you reduce your discretionary spending and boost your savings accounts.
The key to successful saving is putting aside small amounts regularly, over a long period of time. Start this habit now and watch your savings grow!
Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.