Five simple steps that will help you to save consistently have been revealed by one of Australia’s leading financial advisers.
In a recent blog post, Victoria Devine, from Melbourne, says you must start by identifying your attitude towards money, which has likely been influenced by your parents’ spending habits.
The 29-year-old host of advisory podcast ‘She’s on the Money’ says you must then determine your financial position to establish a budget and cash flow system appropriate for your income and needs that will allow you to take control of bills.
Once this is dealt with, Ms Devine say you should set clear goals about what you want do with your money and cut out spontaneous spending on non-essential items by reviewing recent transactions.
Scroll down for video
Australian financial adviser Victoria Devine (pictured) says saving must start by identifying your attitude towards money
1. Understand your money story
Ms Devine says consistent saving can only begin when you understand your ‘money story’, which is typically moulded early in life.
Parental influence plays a huge role in our relationship with spending, according to Ms Devine, who says you can only achieve financial freedom by realising why you are the way you are with money.
‘Maybe things were tight at home when you were little so now you save every penny you have and find it hard to spend, or maybe you spend money as soon as you get it for fear it will be taken away,’ Ms Devine wrote.
Instead of allowing your money story to define you, she suggests using it as a tool to avoid slipping into bad spending habits.
The tip drew praise from aspiring savers, with many saying it has helped them to understand their relationship with money after years of confusion.
‘Love the idea of finding your money story. I was able to write mine down and it’s really helped me realise why I am the way that I am, and which areas to work on,’ one woman replied.
2. Know your financial position
To take control of your money, Ms Devine says you need to be honest about your income and expenditure and create a budget that fits the two.
‘The sooner we make a plan, the better,’ she wrote.
‘It’s important to remember that budgets aren’t about restriction, they’re about understanding our financial position and spending accordingly.’
Ms Devine insists restrictive budgets that limit you to $50 per week are unrealistic and almost guaranteed to send you slipping back into old habits.
To take control of your money, Ms Devine says you need to be honest about your income and expenditure and create a budget that fits the two (stock image)
3. Get on top of bills
While bills are framed as one of the biggest sources of stress in adult life, Ms Devine says it is disorganisation around them rather than bills themselves that leads to sleepless nights.
To avoid late fees and last minute panic, she recommends using services such as BPAY, a secure platform where you can manage bills with one payment method through your online banking.
The service offers recurring payment, pay now and pay later options, meaning there’s something to suit users of all income.
4. Set clear goals
Ms Devine says direction is key if you want to achieve financial security, which is why it’s so important to know where you want your money to take you.
She suggests writing down money goals for short (one to two years), medium (three to five years) and long term (five to 10 years) periods to reflect on where you would like to be at each milestone.
‘By writing these goals down we can see what we’re actually working towards, which enables us to visualise things more clearly. Plus we can put plans in place to help us reach those goals,’ Ms Devine wrote.
For example, those planning to save $20,000 in two years will need to put away $193 a week to achieve that goal.
‘Is that realistic for your cashflow? If not, then we can adjust to what is realistic and work from there,’ Ms Devine wrote.
We’re all guilty of it, and Ms Devine says the best way to stop spontaneous spending is to review your recent transactions (stock image)
5. Strip back non-essential spending
We’re all guilty of it, and Ms Devine says the best way to stop spontaneous spending is to review your recent transactions.
She recommends printing two to three weeks’ worth of bank statements and looking over them, highlighting any purchase that can be immediately deemed non-essential.
Takeaway coffees, weekly after work drinks and online shopping sprees are among the most obvious offenders when it comes to spontaneous spending, Ms Devine says.
‘When you see all of that highlighter you’ll know pretty immediately where you need to be adjusting your spending habits,’ she added.