Simple tips to help control your money
If controlling money was easy, we’d probably be sunning ourselves on some sort of gold-plated yacht in the Caribbean. Bu just because something isn’t particularly easy doesn’t mean it’s impossible to do. We’ve put together a selection of simple tips for controlling your finances, including some sage advice from 84-year-old master-saver, Peggy Runting.
1. Know where your money is going
If you’re looking to control your money it’s important to consider wealth not just as a measure of how much money is coming in but also how much is going out. According to Clair Mackay, a financial advisor at the firm Quantum Financial, “If you don't know where you spend money, you won't know where you can save… My wealthiest clients know exactly where all their money goes.”
Understand your balance sheet on a broad scale, including what sort of investments you have and how much debt, or borrowings, you owe, but also the miniature day to day expenses and the affect they’re having on your monthly income. Take everything into account in your calculations, from your groceries, utilities bills, insurance costs, telecommunications bills, even your daily coffee.
2. Make a simple budget and stick to it
Budgeting does require discipline, impulse control and diligent logging of all your expenses, but it’s still the most effective way of controlling your money. The good news is that there is a range of useful apps and online resources floating around the internet these days that make it easier to understand your expenses without a degree in accounting.
3. Cut down on expenses
Sometimes you can make financial wins with just a little bit of will-power. Making your own lunch instead of going to a café, watching a DVD instead of going to the movies or even taking the bus instead of driving are all ways to stretch your dollar that little bit further. And while each of these things may only seem to make a little difference, they all start to add up over the long term.
4. Use cash for more purchases
Since the late 90’s phycologists have been examining consumer behaviour in relation to credit cards and they generally found purchases made by cash are more “painful” to consumers than those made by a card. Use this to your advantage when you’re shopping and buy as much as you can with cash. This will actively encourage you to seek out bargains and the best deals and avoid impulse buys.
Peggy’s Savings Story –
84-year-old Peggy Runting runs through her tips to success after a lifetime of saving:
“I had a chequebook, we lived near the shops and we had a regime,” Peggy says. “You know how much you can afford. I was making money. I used to go and bank it every couple of days and I knew how much was coming in. With your budget you know what you can do. It's not hard at all.”
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