Peard Finance expert Warren Littlefair shares his top tips on how to keep money matters simple.
Finance made simple. Sounds like an oxymoron, doesn’t it?
The amount of people who try to make the subject as complex as possible always amazes me. Talk of interest rates, leveraging, savings, retirement plans … It makes you want to hide away from it all. However, if you keep things simple and follow some basic plans you will find that your finances can be a fairly easy subject to digest and perhaps even enjoy.
Let me share a few tips with you to make life a bit easier.
My number one tip to help you on your financial way is to think before acting. From a financial point of view it’s always important to base your buying decisions on need rather than want. Sure, splurge on the odd luxury if you can afford to but if the splurging takes over then your finances will suffer greatly.
Make sure you think about the impact of a purchase on your budget and if it is a large purchase that you need to get a loan for, make sure you are aware of how much of a dent it is going to put in the weekly budget.
Be credit savvy. It’s not a case of not using credit at all. It’s about making sure that you control your credit and credit doesn’t control you. That’s very easy to say but much harder to do. By all means use your credit cards but make sure you pay them off in full by the end of the month.
The interest rates you pay on your credit cards can be extremely high and add significant amounts on top of your credit card debt. If you need to carry debt over on your card make sure it is one of the low rate credit cards which are now on offer.
Make sure you don’t have a multitude of accounts. This can include bank accounts, credit card accounts and one of the worst culprits, superannuation accounts. Most accounts attract fees so the more accounts you have, the more fees you will pay. It’s that simple. In the case of superannuation, make sure you speak to a qualified advisor who can advise you on the best way to roll these accounts over.
You will be surprised by how much you can save by streamlining all of your accounts into ones you actual use. Plus there is the added benefit of being able to keep track of a small number of accounts.
Don’t spend it until you have got it. How many times have you gone out and spent that bonus, the anticipated tax cheque or even the proceeds of an investment before it actually comes in? What are you going to do if it doesn’t come in? Ouch. Sounds really simple but make sure it is in your account before you take the plastic out and blow it.
Look to the future. Many people don’t like to admit it but all of us will have to retire some time in future. Have you got a plan in place so you will have a comfortable retirement? Perhaps today is the day when you start to think about making a plan. If you start to think to the future sooner rather than later, retirement will hopefully be successful.
Speak to your financial advisor to look at the best options for you. As the saying goes, the greatest journey starts with one step.
So these are some simple ideas to help you start thinking about your finances. If you take the time to think about your current path and, if necessary, make a few small changes you will be surprised by the impact these changes can make.