We’re one-third of the way through the year, so how have your resolutions been holding up? If you’ve already quit the gym and the books you promised to read are still sitting in the shopping bag, don’t stress – there’s still time to stick to one resolution: breaking your bad money habits.
The thing to remember is that you’re not alone, believe me. We at finder.com.au see too many people struggling with the same money issues. What people don’t realise is that these issues can all be fixed with relatively little effort. Here is my list of bad money habits and how you can break them.
The problem: You don’t save your money.
The solution: Start saving. It’s as simple as that. The best way to start is to set up a high-interest savings account and organise an automatic transfer for when you get paid. It’s recommended to save 10% of your pay, but if this sound a little steep you can start with 5% and see how you go. Don’t overreach and try and save 20%, because if you fail to stick to it you may not end up saving anything. You can even go one step further, and opt for a high-interest savings account that only gives you bonus interest if you make no withdrawals for that month. More motivation to save!
The problem: You aren’t paying off your credit card debt.
The solution: Get a balance transfer. Some balance transfer credit cards on finder.com.au are offering 0% p.a. on balance transfers for up to 24 months. This can help you get your credit card debt under control without incurring interest, potentially saving you hundreds or even thousands of dollars, depending on your debt.
The problem: You can’t control your spending habits.
The solution: Put yourself on a spending diet. Set yourself a spending limit for the week and then withdraw that amount of money in cash. Each day, only take the cash you are allowed to spend with you. This keep your spending under control because you can’t use your cards and it will also regulate your spending. If you get used to spending just $20 a day on coffee and food, it will eventually stick. You may find that you’ve got money left over at the end of the week that you can use to feed your shopping-starved self, kind of like a cheat day.
The problem: You don’t know where your money goes.
The solution: Find out. Print out your statements from your transaction accounts and your credit cards and see where your money goes. When you’re categorising your purchases the trick is not to make them too broad, because ‘entertainment’ could mean $100 on drinks at the bar or a $10 magazine, both of which are quite different. You want to understand where your money goes so you can make more informed choices next time you pull your wallet out. If, like me, you don’t have the time to get the calculator out to do this, you can find a site online or download an app that does all this for you – there’s plenty of them to choose from.
So don’t stress over your next credit card bill or count down the days until your next paycheck, break your bad money habits and get your finances under control.
Money Expert at finder.com.au