Does it feel like your hard earned dollars are disappearing into a bottomless black hole? Well, now is an excellent time to fight your way out of the money mire by creating a personalised savings plan that includes some exciting goals. And surprisingly, that’s not as hard as you might think.
Planning ahead by following these five suggestions, could make all the difference to your financial future:
- Write it Down: Written goals are clear, measurable and motivational – and statistically, that makes you far more likely to succeed. So, take pen to paper and list your financial goals. Do you want to clear your credit card debt? Save for a house deposit? Buy a new car? Travel around the world? Enjoy the process of listing your goals, because setting this plan is the start of creating a great new life for yourself. When you’re done, calculate the amount required to achieve each goal … and yes, write it down.
- Incoming vs Outgoing: First, list all of your outgoings, from bus fares, utility bills and gym membership, to groceries, entertainment and health care. Be sure to include your expenditure across a 12 month period so you don’t omit payments that only pop up every few months. Now deduct your annual expenditure from your annual after-tax income and divide by 52. If your expenditure was less than your income, that’s the amount you can save each week. However, if it’s in the red you’ve just found your black hole! Either way, let’s take a look at Step Three.
- Blissful Budgeting: A healthy budget means that your annual income covers your annual outgoings, hopefully with some to spare. However, if you’re motivated by some exciting financial goals, you can increase your savings by trimming back your expenditure – and if your budget is in the red, you should be cutting your spending down to bring it back into balance. Many savvy savers are now reaping huge financial rewards through the rent-free living afforded by house or pet sitting. Let’s say that you decide to house sit for 6 months, and that you currently spend $200 per week on rent. That’s $5,200 extra in your bank account. Goodbye nightmare and hello sweet dreams!
- Make it Grow: Don’t let your savings stagnate! Do your research, track down the best rates, be sure you understand what’s in the fine print, then watch your money grow. And try to find an interest bearing account that allows you to add more savings as they become available. Just think, you might enjoy house and pet sitting so much that the six months becomes 12, then 18! You could be in the enviable position of adding several thousand dollars to your savings account every few months.
- Monitor Your Progress: Even written goals aren’t much use unless you revisit them. Take the time to regularly read through your financial goals and check your progress. If you’re doing well, you might like to reward yourself with a little treat. If you’re not so happy with your figures, go back to basics, check through your budget and re-evaluate your expenditure. Remember, a few short term cut-backs can result in some substantial long-term rewards.