FIVE STEP FINANCIAL HEALTH CHECK
With the end of the financial year just weeks away, now is as good a time as any to stop and review where you’re at with the hip pocket. Here’s 5 simple steps.
STEP 1 – CREATE A BUDGET
A budget is really the only way to know where your money goes. You don’t need complex databases or software, just a simple spreadsheet will do the job. There are also plenty of apps to track spending habits that even connect to your bank account or credit card.
Most people who create a list are surprised at how much they are spending. You may also notice expenses you no longer need like subscription services or memberships.
STEP 2 – Categorise your Expenses
Be honest with yourself about the cost of essential expenses including utilities and food, compared to lifestyle choices including dining out and Netflix. By categorising your expenses, it will help you decide where you can cut back in tough times.
STEP 3 – Calculate your surplus money
Record your net monthly income (after tax and super) including any odd jobs or Government benefits in the spreadsheet then subtract your total income from your total expenses to calculate your net surplus. If this is a negative number, you are spending more money than you make, and cost cutting is required. If money is left over, consider putting aside for savings or pay down debts faster.
STEP 4 – Hunt for a Better Deal
Use comparison sites to check for better deals for insurances, power, internet and phone. But before you switch, call your current provider and ask them for a better deal. You would be surprised how often this works!
STEP 5 – Consolidate and Refinance
Use comparison sites to check for better deals for insurances, power, internet and phone. But before you switch, call your current provider and ask them for a better deal. You would be surprised how often this works!
The information provided is for educational purposes only and is not to be taken as financial advice.
