Need help saving? 4 tips to turn your finances around

Despite stagnating wage growth, rising mortgage debts and increasing bank fees many Aussies are still finding clever ways to save and build personal investment portfolios.

A Suncorp survey revealed the average Australian was putting away around $400.00 a month in 2016 with a typical savings target of $11,234.00 according to Westpac research.

If getting your finances on track seems like one of life’s biggest challenges, now is a great time to turn things around. Check out these 4 tips to help you take control of rouge spending habits, start saving (painlessly!) and brighten your financial future.

Forget saving willpower: Put your money on cruise control

We’d be rich, fit and kicking goals all over the place if willpower was reliable. But, surprise, it’s not. If you’re the ‘live for today’ type, banking on willpower alone to save for your dream trip, house deposit or build your investment portfolio is a fickle plan.

A better idea is creating an automated money system that moves you towards your financial goals with minimal effort. By creating a system that automatically schedules money for savings, investments and bills each payday, you’re paying yourself first and removing the temptation to spend. FirstStep helps you painlessly save for your goals and build a mindful investment portfolio on autopilot. No willpower needed.

Know how you spend

In 2016, the average Aussie spent $74,301 on general household living costs including eating out, beauty, gadgets, fashion and alcohol. Understanding spending behaviour is key to changing money habits that don’t serve your big picture financial goals and creating a realistic budget. To identify habitual spending patterns you need a method of tracking where your money goes. Like they say, you can’t manage what you don’t measure.

Habitual spending behaviour may be things like splashing out on expensive purchases every payday, constantly withdrawing from ATMs that charge fees or buying lunch every day.

FirstStep automatically organises your spending into 9 broad categories so you can track exactly where your money is going. Other spending apps like PocketBook and Moneytree also help you track your cash with shiny reports, graphs and notifications. Type A’s, we hear you cheering.

Want future financial peace? Make your money hard to touch

Currently, the average fortnightly pension payment for a single person is $907.60; hardly enough for a comfortable retirement if you’re living on the pension alone. Who knows what this figure will look like in the future?

Making your money untouchable in the short term will accelerate the growth of your future nest egg. When extra cash comes your way, think birthday money, tax refund or bonus, tuck it away somewhere other than your bank.

Making additional contributions to your superannuation or investment portfolio makes your money difficult to access in the short term. With FirstStep’s ‘Quick Deposits’ feature, you can invest any amount at any time to your portfolio where it can do a lot more for you over time than spending it all now. Your future self will thank you.

Avoid lifestyle inflation and simplify your wealth growing strategy

Edit your lifestyle spending and get real about an actual ‘needs’ vs a ‘nice to have’ to boost your saving and investing capacity. Flex your frugal muscles; try a week long spending diet. Cut spending on anything except essentials and sock away the money you save.

Simplifying your wealth growth strategy will also help you stay on track long-term. Scott Pape, The Barefoot Investor, recommends a simple but effective money management system; the 3 Bucket — Grow, Mojo, Blow approach. Make it your own and get your financial strategy sorted and set up in less than 15 minutes.

Sources:

Canstar: Suncorp finds Gen Y are Australia’s best savers

Westpac bank: Financial fitness a top priority in 2016; Australians pledge to save $21 billion

The Barefoot Investor: The Only Money Guide You’ll Ever Need. Scott Pape

ASIC Money Smart: Super Contributions guide

Disclaimer
FirstStep is licensed to operate in Australia and is owned and operated by FirstStep Investments Australia Pty Ltd (ACN 612 834 947) — Authorised Representative of Primestock Securities Ltd, AFSL 239180. Any information contained on this page is general information only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any information contained in this page and before making any investment decision, we recommend that you consider the appropriateness of its content having regard to your needs and financial situation. The relevant Product Disclosure Statement (PDS) should also be obtained and considered before making a decision about any financial product.