The financial year is creeping to a close (again!), and you may find you’ve been left with only holes in your pockets! It’s time to dust off those plans that didn’t quite get off the ground and kick-start your savings plan for 2012/13- and we’ve got the expert advice on how to do it!
By Anna McDougall, The Money Maven
In this expensive world, it can be hard to slow down on the spending without feeling like the ‘tight’ friend. As with many things in life, slow and steady always wins the race. By simply substituting a few things in your life you can feel satisfied and save money at the same time.
Instead of going out every weekend, wait for that extra special restaurant opening or host a get-together at home, instead of blowing your weekly wage shopping for clothes online, save up for the statement piece you’ve been dreaming about. Being frugal doesn’t have to mean you don’t get to see friends and family either – spend time, not money!
In the long run, saving up for an exotic getaway is going to feel a lot better then winding up with an expensive hangover every Sunday morning.
While we get starry eyed at the thought of a handsome tax return (hello, holiday!), Noel Yeates, Macquarie Private Wealth Manager and finance expert with more then 20 years experience in the industry, advises the best way to save more cash to help make our dreams a reality in the next financial year.
1. Know what you want
Make two lists. The first will contain the top five goals you would like to achieve in the next 12 months. The second will show three long-term goals for the next 10 to 20 years. For each list, be sure to highlight how much money you will need for each goal.
2. Track your dollars
Now you know what you want, it is important to understand how much money you are bringing home, how much is going out and where it is going to. The best way to do this is to record income, expenses, assets and debt in a simple spreadsheet, or carry a notebook around with you to jot down your spending.
3. Set a realistic budget
Using the detail revealed from the above two steps, you can now draw up an achievable budget. As a general guide, 10% of your budget should go towards saving for your short-term goals, 15% towards your long-term goals and 75% towards everyday expenses. To help in reaching your long term goals, once you have an amount saved you may consider ways to make those funds work harder for you over the longer term and there are many ways to do this.
4. Treat yourself to celebrate milestones
That’s right, you read correctly. Small celebratory purchases along the way will help curb impulse spending sprees from feeling you have been too restricted by your savings plan for months at a time.
5. Stick to it
Don’t lose heart. Every time you feel the temptation to deviate from your plan, revisit your goals, marvel at your rising bank balance and count down the days to achieving your first short-term goal.
See how you can maximise your credit card savings here.
