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Could these things be derailing your financial future?

I read an article the other day and although it's a few months old, it has some great points to take note of.

The article refers to the HILDA (Household, Income, Labour & Dynamics in Australia) Report from 2018 which showed that fewer than 50 percent of Australians were able to answer some basic financial questions. The article goes on to suggest that this isn't because we've chosen to mismanage our money but rather that we mightn't know where to start or have opted out of the processes. As most of my clients would have heard me say 'You don't know what you don't know' and that's okay. It's staying there that isn't so great.

The article also has a few things to watch out for which I've expanded slightly:

  1. Using credit - You may be using credit so often that you're not sure how to stop. Research quoted in the article shows that when we use credit spend at least 10 percent more and we subconciously view it as play money not actual cold hard cash that we've worked hard to earn. If you have any credit cards that you don't pay off in full every month...things need to change if you want to get ahead financially. Tip - Leave your credit cards at home (or destroy them) and use a debit card so you know when you're at the end of your money.

  2. Buying stuff you don't need - Our culture is one of supposed freedom 'you can have whatever you want, whenever you want it' but this is not the truth. The article notes that the Joneses (ie keeping up with the Joneses) are actually now those who are given products to sell to you - ie they're not even buying them. Tip - spend some time on your own or with the family deciding the difference between wants and needs. Just because someone else says something is a need; doesn't make it so.

  3. Living payday to payday - Many of us are treating our pay like a big bucket; spend until its gone and hope it's not too far out from the next payday. Create 'smaller buckets' by working out how much of your pay should be put away for rent/mortgage, bills like utilities and other expenses while setting aside a small portion for you own discretionary spending. Tip - Automate the movement of money into each smaller bucket each payday leaving you with your spending allowance for the period.

If you are looking at your finances and wondering if you'll ever be able to afford your own house or that investment property you'd like or even the family home that you're dreaming of there's a budget tracker the website (click here) which can help you get started.

Article is here