In an era of increasing interest rates, surging inflation and households facing financial strain, protecting your bank account has become a challenging endeavor.
Navigating this economic rollercoaster necessitates a profound comprehension of financial management coupled with a significant dose of "financial mindfulness," as suggested by financial advisor Canna Campbell.
Experts offer their top 10 recommendations to help extend your budget a bit further.
1. Conduct a Comprehensive Financial Assessment: Perform a thorough evaluation of your personal financial circumstances. This involves analyzing income, expenses, debts, savings, retirement plans, and investment approaches. The goal is to identify strengths, uncover potential issues, set financial objectives, and formulate a feasible strategy to enhance overall financial wellness. According to Canna, engaging in this process yields a sense of empowerment and inspiration, leading to improved financial outcomes.
2. Print Your Bank Records: Money expert Effie Zahos proposes a straightforward habit that can maintain spending discipline. Zahos advises printing bank statements and using two distinct highlighter colors. One color is designated for regular household bills, while the other is for discretionary spending. This visual representation of your digital spending habits can provide the motivation needed to make constructive changes.
3. Develop a Budget: Establishing a budget is not about restricting spending but rather defining spending limits for cherished items. Compile a list of all expenditures and identify areas where wastefulness can be curtailed. Canna emphasizes the importance of recognizing financial leaks to effectively address them.
4. Set Financial Objectives Whether it involves clearing credit card debts or initiating an investment portfolio, the act of defining and working towards financial goals holds more significance than the specific goals themselves. Canna prompts individuals to strategize for both short-term emergency savings and long-term passive income generation, contributing to a comfortable retirement.
5. Discard Credit Cards: Canna emphasizes that credit card usage often leads to higher spending compared to cash or debit card transactions. She explains the "pinch effect," wherein the tangible act of parting with cash creates a more immediate awareness of spending. This practice serves as a reality check, preventing the accumulation of credit card debt.
6. Repay Debts: Effie advocates a debt reduction approach to seize control of one's finances. Prioritize paying off debts based on either their interest rates or the achievability of eliminating smaller debts first. Effie's strategy empowers individuals to tackle debt systematically.
7. Scrutinize Bills: Effie advises a thorough examination of household bills, questioning the charges and exploring opportunities for securing the best rates. This applies to energy bills, home loans, and any other recurring expenses.
8. Embrace Meal Preparation: Canna highlights the significance of meal planning and prepping to counteract the convenience trap that often leads to overspending. She suggests making meal preparation efficient and resourceful, utilizing existing ingredients before heading to the supermarket. Bulk purchasing, freezer utilization, and shopping lists contribute to prudent spending.
9. Leverage Technology: Effie underscores the value of technology for budgeting and saving money. Various apps can assist in budget setting and adherence, fuel price comparisons, and grocery savings during checkout.
10. Maintain Realistic Expectations: Effie emphasizes the importance of setting achievable goals and periodically evaluating progress. Reflect on the best possible utilization of current income and engage in open discussions about finances with a partner to cultivate financial well-being.
The House of Wellness TV show airs on Channel 7 on Fridays at 2pm and Sundays at noon.
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