When you hit your mid twenties, you start ask yourself who you are as a person. Where are you headed? Should you be settling down to buy that apartment?
However, if you’re me, the annoying question I constantly ask myself is “how much money is in my bank account?”
I, like some of you, feel I haven’t got much to put next to my name – I own my car, I own my furniture, I have an extensive wardrobe and I can pay my bills/rent on time no hassles. But I find I always have a little debt hanging over me, ruining my social life and emanating that consistent ‘never getting ahead’ feeling.
If any of you have seen ‘Confessions of a Shopaholic’, you will understand how most of that debt is attributed to shopping – a curse I inherited from my mother.
I have experienced the moments of no debt (that lasted a week) followed by the unexpected car repair, friend’s destination wedding, hens/bucks nights that end costing more than expected.
Nowadays, I have found the need to be savvy with my savings and implement some forward planning, so whilst I see debt on my credit card, I also see money in a high interest account helping me get it cleared.
So how do you do it? You start by breaking down your needs vs wants. I’m a planner, so I look at my short term expenses like fortnightly rent, transport fares, groceries, lunch money and petrol for my car. Once I deduct those from my month, I get a clear idea of what is left.
AMAZING! There is actually quite a bit leftover, so now I plan out what I’ve got coming up – a phone bill, a birthday, a wedding or perhaps a holiday I’d like to plan. Then I’ll work out if I can afford to place more money from this particular pay into my high interest account. Now I am a month or more ahead of the game.
DEBT NO MORE, COME AT ME BILLS!!
Looking at the big picture payments that come every 6 – 12 months like car insurance, health insurance or regular memberships, try move some of that money into your high interest account to get yourself prepared for when those bills do rock up. When you start building up the account, you will begin to see the benefits – the more money you move, the better the return will be.
SING IT WITH ME NOW – Money, money, money, money. Money!
The mistake we make is always using our credit or debit cards, but not regularly checking our statements. My partner is always shocked to see how much went on his credit card because he uses it out of habit and underestimates the balance. Without reviewing our spending, these small amounts can add up.
My secret is to set up direct debit payments that go into my high interest account. That way, the money is ready to go and will earn me more before I transfer it to my credit card. On top of that, I don’t see it and most importantly, I don’t spend it. Leave the credit card at home for a few weeks too, if you can survive without it, you will be much better for it.
If you are in a relationship, set some goals for yourselves. For example, $50 a week each into the high interest savings account and any loose change into a jar. That way, you’ll always have money for coffee and better yet, a nice little savings boost after a few months or years.
A joint credit card can also be useful and can be managed together – As long as one of you is putting the foot down.
All these little things seem tough at first, but if I can do it, you can too.