8 family finance tips to have more money
How can you make a difference to your family finances in the year to come? By acting on even one of these eight tips you could be finding yourself a lot better off in 12 months’ time. And if you do all eight, the sky’s the limit.
Cameron McLean is a Financial Planner AFP® with Acumen Wealth Management in Perth. His special area of interest is helping families to be in control of their financial future, such as helping with debt minimisation, savings for their kids’ educations, and working towards and implementing investment strategies.
Here are Cameron McLean’s top tips to improve your family’s finances in the next 12 months.
1. Prepare a realistic budget
“The first time you do this you will be surprised at how much unnecessary spending you do. Don’t expect the new budget to work immediately; it may take time to adjust. However, after a year you will have much more control over your spending and next Christmas will be much less stressful financially,” he says.
You may need to track your spending for a few weeks before you can prepare a budget. Write down everything you spend every single day, or use an app such as Track My Spend or Spending 2. After four to six weeks you will easily be able to see what spending can be curtailed and what is essential.
2. Plan your meals each week
McLean says that by having a plan, you know exactly what to shop for, which will help eliminate buying things you don’t need. “It will also make it easier to budget for your shopping.”
Get adventurous and add some new recipes to your repertoire. They don’t have to be complicated or expensive. With Australia’s love affair with food and cooking you don’t have to look very far to find great recipe ideas. TV shows, magazines, websites and whole books dedicated to ‘15 minute meals’, ‘just four ingredients’, or ‘great meals on a budget’, to name a few, can be useful. Also consider shopping and cooking in bulk, buying key ingredients when they are on sale, such as nice cuts of meat, and utilise your freezer to store leftovers to avoid food waste and ensure you always have a tasty meal on hand. This can prevent the temptation to buy expensive take-out meals, and is also better for your health.
3. Compare utilities provider prices and change to cheaper ones
“Providers are very keen to get your business,” says McLean. Compare your current gas, electricity, phone and other regular bills with the aim of getting the best deal. “If you can show your current provider that you have a better deal elsewhere they will often try to match this in order to keep you.”
4. Never make quick decisions on large purchases
Emotions can play havoc with our spending behaviour. McLean gives the example of buying a new car. “There are usually a few ‘hidden deals’ in most car yards. Also, when a model of a car is upgraded the previous version tends to become much cheaper in order to clear stock,” says McLean. “And this doesn’t just apply to cars.”
To keep impulse buying in check, try giving non-essential purchases 24 to 48 hours before you spend your hard-earned money. If it means you might miss out on a “great deal” it probably wasn’t meant to be. And afterwards you might see that you dodged a $500 bullet and it would have been money wasted.
5. If you have children, start putting 5-10% of your income aside for their education
You could use tax effective education bonds, which are specifically designed to provide for all necessary costs of education. Even if you are not paying for private schooling, there are still inherent costs in the public system, as well as tertiary education, which is fast becoming a requirement for most career paths, and not just an option.
6. Renegotiate your home loan
McLean says financial institutions are usually very open to this if they are at risk of losing you.
“Get to know what other institutions are offering and discuss this with your bank. A lower interest rate can result in considerable savings over a year, not to mention how much you save over the life of the loan.”
7. Pay less for pay TV or cut it out altogether
“When it comes to pay TV, what are you actually watching?” asks McLean. “People will usually watch more over the holidays, or only really watch sport, kids’ channels and movies. So review what you are paying for and look to get a contract that does not lock you in long term. Only pay for what you need.”
You can also explore other options such as streaming services like Netflix and Stan. Both offer a one month free trial and have one-screen plans starting at $10 per month, going up to $16 or $17 per month for multiple screens. A word of caution: you do need to have a good internet plan for streaming services.
8. When taking holidays, look out for deals
There are travel apps and websites such as Last Minute that will find holiday deals and send alerts when good flight and hotel deals become available.
To save on accommodation or get it for free, sites such as Love Home Swap and Home Exchange offer the chance to swap your property with others from around the world. Aussie House Swap, is a similar service in Australia.
Online source: Produced by The Financial Financial Planning Association of Australia and published on 20 December 2017. Original article.