by Leanne Watson
We all know that sinking feeling when an unexpected bill comes in that throws the monthly budget out of the window; it can often feel like no matter what we do there just doesn’t seem to be any way to get ahead. You constantly feel the lack of money; cold hard cash!
If you read or listen to the news today, you could get very depressed about your ability to grow your wealth base. Especially if you’re in the growing number of 50+ women.
The mistake that’s often made when thinking about where we’d like to be with our money is that we focus on the BIG dream, and that can feel really overwhelming. I’ve read many times, that we over- estimate what we can earn in 1 year, and underestimate what we can earn in 5 years.
The reality is that it’s not the big complex issues that make the biggest difference, it’s the little decisions that create lasting transformation.
And that’s just what most people don’t realise, It’s the LITTLE things that make the biggest difference when it comes to building real and lasting wealth.
Remember, inch by inch it’s a cinch … decide on the big goals and then break them down into little steps and focus on each individual goal until it has been achieved.
Here are 4 simple tips to help you effectively take control of your money as opposed to it having control of you.
I Create a Spending Plan
That’s right A Spending Plan. Are you aware of just how much money it takes to run your household/business?
Make a date with yourself and your partner if you have one and if you’ve got children still living at home then involve them too.
How much do you really spend?
▸ Bank and credit card statements (Some banks allow you to download your transactions as csv/excel spreadsheets
Grab a pen and paper or a computer and an excel spreadsheet and work out what expenses come in and when and on average how much they are over a 12-month period (Even the things that you perhaps shouldn’t have spent money on)
Remember there are some that are weekly, fortnightly, monthly, quarterly, bi-annually and yearly … if you’ve got 12 months of statements and bills, this should capture them all.
An easy way to do this is to download my Take Control of Your Money Planner, it does it all for you and comes with a handy guide!
What else do you spend money on?
An interesting part of this is making note of all the things you spend your money on other than bills
▸ Add up your total spend and take it away from your net income.
▸ Is there more income than expenses … OR is it the other way around?
▸ What adjustments can you make?
II How much do your bank accounts cost you?
Check your statements for fees and charges. Are there:
▸ Monthly account keeping fees?
▸ Annual fees (credit cards and mortgage packages)?
▸ Late and overdrawn fees? (check your bills for these as well)
There are many banks and credit unions that offer bank accounts with no fees. Do some research and find them. No sense in giving away your valuable, hard-earned money, or carefully saved retirement income nothing.
Do you have a mortgage?
If you’ve got a mortgage over a certain amount, then more than likely you’ll have an annual or monthly package fee. Don’t be too disturbed by this because you probably got a cheaper interest rate as a result.
Late and Overdrawn Fees?
If you’ve got late and overdrawn fees, then go over your statements and see if there’s a pattern to them. If there is, then work out a way to change your money use.
Check for charges to your account every statement, often if the odd overdrawn and/or late fee will be credited back if you call and ask; especially if you don’t know what the charge is for! This goes for your bills as well.
Remember, this is your money and it’s easier and less costly for someone (even a bank) to keep a customer than it is to find a new one!
ALWAYS, ALWAYS, ALWAYS check for random charges … Banks make mistakes, and they should not keep more of your money than is strictly necessary. Ever.
III Create a Bills Account
How much do you need each week to cover your average expenses? Put that amount into an account that’s only used for bills.
IV Create a Goals Account
Think about what you’d like to do and have and, most importantly, WHY you want to do and have those things. Are they on your Bucket List or is that a separate thing?
Is it a new car, a home, an investment property, adding to your retirement income, travel, … the list goes on.
Your WHY is the most important part of the question.
Get into the feeling; create a Vision Board or write yourself a story or a letter and read it often to remind yourself … particularly on the tough days!
Are these things so important to you that you’re prepared to change the way you do things?
Once you’ve decided on your WHAT and your WHY, decide on an amount you can afford to save and have it automatically credited into an online account with no card access.
Once you’re used to that amount going out, increase it;! It’s amazing how little you notice if it happens automatically.
I’d love to know whether these tips have made a difference. Contact us; we’d love to answer any questions you may have!
Have fun and live life; creatively and on purpose!