- Posted by: Nick Lucey
- Category: Advice, Budgeting, Financial Planning, money, Saving, Tips & Tricks
Do You Keep Track Of Your Cash?
A recent study has found a third of Australians are financially strained and some often struggle to make ends meet.
It’s estimated that the average household in Australia spends about $1,425 a week on general household costs, but it’s not just big-ticket items, like rent (or mortgage), groceries and transport that eat into our bank balances – it’s the little items that can really add up and make it hard to keep track of your cash.
Most of us have daily ‘leaks’ from our wallets that we rarely budget for – coffees, magazines, takeaway food, unnecessary fees and charges or ‘set and forget debits’ – which can all take a toll on where our money goes.
If you want to be able to better answer the question ‘where does my money go?’ here are some tips that might help.
Keep An Eye On Every Dollar You Spend
You can keep receipts for every purchase you make and then add the details to an app (ASIC’s MoneySmart TrackMySpend is worth checking out), spreadsheet (you might find ASIC’s MoneySmart budget planner useful), or notebook, making tracking your incomings and outgoings easier.
Once you’ve got visibility of your spending, you can identify where you’re paying unnecessary fees and charges, such as for a home phone line or gym membership that you might only use rarely, or where you’re paying too much. It can often pay to shop around, so contact your energy, mobile, Internet, car, and credit card providers for a better deal.
Change Your Spending Habits
Once you’ve identified where your money goes, particularly unnecessarily, you can start taking action:
- Work out exactly how much you’re spending on the little things. Set yourself a daily limit as to what you’d like to spend and make sure you don’t go over it.
- Only buy what you need at the supermarket, so you don’t waste food and money.
- Check the back of your shopping list for discounts at local stores or cinemas.
- Try a new recipe at home rather than order takeaway.
- Read a book or go for a walk rather than go shopping if you’re feeling bored.
- Borrow books, DVDs and games from the library instead of buying them.
By being aware and mindful of how much you spend on impromptu purchases, you’re more likely to keep track of where your money ends up.
Create A Budget
Having an annual budget can be very useful if you want to plan where your money will go and understand how much you can afford to save for things like holidays, renovations, or school fees.
Have An Emergency Savings Plan
Putting aside some money for emergencies or unexpected events is often a good idea, and it may be easier to do when you know where your money is going and can cut back on unnecessary spending.
An emergency fund can give peace of mind and it reduces the need to rely on high-interest borrowing options, such as credit cards or applying for payday loans, which can often be an expensive form of finance and create unwanted debt.