The A to Z guide to financial fitness
Want to make this the year to get your financial affairs on track? Follow these tips (to the letter) and you too can overhaul your fiscal future.
A – App-ily ever after
Download popular financial apps such as Pocketbook, WeMoney and GoodBudget, and you can track spending, sync financial institutions and get an overall picture of your financial health at the touch of a button.
B – Budgeting
Introducing a simple cash flow system is a great way to stay on top of your finances, WLM Financial Services financial planner Sean McGowan says.
“What you want is to allocate 60 per cent of your after-tax income to non-discretionaries such as mortgage and utilities, 20 per cent to savings, 10 per cent to ‘play’ month (discretionaries) and the remainder to ‘stay’ money (holidays, presents).”
- Value your worth: How to ask for the pay rise you deserve
C – Cashback
Cashback deals are becoming incredibly popular in Australia.
Check out ShopBack, which gives you up to 30 per cent cashback on online purchases; Honey, which searches for discount codes, and Cashrewards which searches all the best offers.
D – Debt consolidation
If you’re paying off high-interest debts, Sean recommends consolidating the likes of car loans and credit cards into your home loan as “the interest rates are lower, and you’ll only have one figure to focus on”.
E – EatClub
Enjoy your favourite restaurants at up to 50 per cent off with EatClub, a service that lets you access deals during off-peak or slower periods at local restaurants.
F – Financial planning
Seek advice from a licensed advisor who can help you navigate your path to financial freedom.
Visit the Financial Planning Association of Australia to find a financial planner in your area.
- Financial fitness: 7 steps to achieve your money goals
G – Green thinking
Fancy an app that objectively compares banks and energy providers from a financial and environmental point of view?
Acacia allows customers to link accounts to the app; it also compares interest rates and assesses the environmental credentials of all providers.
H – Half-price food
Cut down on grocery bills by downloading food savings apps such as Half Price, which tells you where products are half-price, and grocery price comparison app Frugl.
I – Inconvenient bank accounts
Deposit savings into a different institution from your everyday accounts; choose one that charges eye-watering fees for withdrawals or makes you wait a day or two for a transfer.
- Clean slate: How to start the year without a financial hangover
J – Joint signatures
Ensure the account you choose has a dual signature requirement, restricting each account holder’s ability to independently withdraw funds or close the account.
K – Keep the change
Set up a round-up account such as Wisr, which rounds up your purchases to the nearest dollar and puts the difference towards a debt, your Wisr loan or a savings account.
L – Lender negotiations
Prepare to shop around for a new home loan, financial expert and Canstar editor-at-large Effie Zahos advises.
The average variable home loan rate for a $500,000 home loan over 30 years is 3.16 per cent but the lowest is 1.88 per cent, according to the Canstar database.
“The difference could shave over $199,942 off your repayments,” Effie says.
M – Money diary
Have overspending issues?
Create a money diary outlining what you’ve been spending money on and how you felt when you bought that item.
Once you see your words in black and white, it can often bring about new changes moving forward.
N – No Spend Days
Reduce discretionary spending by introducing at least one “No Spend Day” a week.
Whatever you would have spent on lunch, groceries or coffee that day should then go straight into your savings account.
- Real life: What being scammed $100k feels like
O – Opt out of subscription services
Be sure to cancel a subscription service for every new one you sign up for, Effie says.
Stick to this and you could save yourself around $168 in streaming costs each year.”
P – Pay yourself first
Focus on wealth creation by organising a percentage of your salary to be direct debitted into a savings account the minute you get paid.
Once savings are tucked away, you can comfortably spend what you have left over.
Q – Question service providers
Make service providers work harder for your money by conducting an annual review of what you’re getting for your money.
Check out comparison sites (such as finder.com.au), and either switch or call your provider for a chat.
R – Raiz
Invest in ready-made investment portfolios every time you make a purchase.
Platforms such as Raiz will round up your everyday transactions and invest the change in a portfolio of Exchange Traded Funds (EFTs).
S – Superannuation top-ups
Aim to deposit lump sums into your super each year.
Not only will you boost your retirement savings, you will pay less tax.
The combined total of your employer and salary sacrifice contributions can be up to $27,500 a financial year.
T – The $5 Game
Aim to pay for everything in cash, and put every $5 note you receive into a piggy bank.
You will be surprised by how quickly the savings mount up.
U – Udemy (and other side hustles)
Have skills others would pay to learn?
Create an online Udemy course your peers will be desperate to sign up and pay for.
Other potential sites to try include Airtasker and Freelancer.
V – Valuing yourself
Take a day or two to go over personal insurances.
Sean recommends private health insurance, income protection, total permanent disability insurance and trauma insurance at a minimum.
Many superannuation funds have life insurance policies attached, but be sure to check if your level of cover is correct.
W – Wills
Consult a solicitor to help you with your estate planning – essential in minimising drama in the event of death or disability.
“You will need a will, a power of attorney and an enduring guardian,” Sean explains.
X – Xmas
Start a Christmas savings drive by depositing $20 a week into a separate account.
Start now and you will have more than $1000 in the kitty by the time Christmas 2022 rolls around.
Y – Yard space
Did you know you can make money by renting out your backyard, wardrobes, car, lawnmower – even the toolkit?
Check out YouCamp, Car Next Door, ToolMates Hire and The Volte for details.
Z – Zzzzz
Give yourself a rest.
You’ve earned it.
For more practical and informative tips to live healthier, happier and better, check out Wellness+, available free at Chemist Warehouse.
Written by Dilvin Yasa.
