Below are 4 tips for managing
1. Spend less than you earn.
At the risk of sounding like Captain Obvious, to get ahead financially you must spend less than you earn.
With the advent of credit cards, lines of credit and interest-free store loans, it’s never been easier to spend money that you haven’t yet earned. That’s why I’m a fan of the old lay-by system that is virtually obsolete these days. It seems like something from the dark ages; you put down a deposit on an item, pay off installments until it’s fully paid and then take home your goods. One tell-tale sign that you are spending more than you earn is that you’re not able to pay your credit card in full at the end of the month. Or, even worse, if you have to redraw money from the mortgage to cover monthly bills.
2. Know your numbers!
You can’t manage what you don’t measure. To put in place point 1, you need to know what you’re actually spending. Very few people can confidently state how much they are spending on groceries, bills or discretionary items. Use a spreadsheet or one of the many online budget/money trackers to start measuring your outgoings. Try it for a month to get handle on what you’re spending. You may be surprised with the results!
3. Sleep on it.
When faced with a decision about a big-ticket item, it’s wise to give yourself time and space to think. We’re often inclined to spend more when we’re emotional. That’s why many potential home buyers use a buyer’s advocate or agent to bid at the auction on their behalf. Removing the emotion and thinking with a clear head gives you a chance to consider whether you really need the item you’re purchasing. So, next time you’re about to buy that new car, expensive dress or lounge suite – take a night to sleep on it!
4. Don’t buy things you can’t afford.
If the only way you can purchase an item is using a credit card or interest-free offer, then that’s probably a good sign that you can’t afford it. Interest-free offers just delay the pain. Go the old-fashioned route and wait until you have saved the required amount to make the purchase.
Culled from: FPA