Whether you’re in a strong financial position or struggling to save, it is always a good time to take stock – looking at how you’re using your money.
Pay off debt
Before you do anything else, work out your debt.
There may be issues you cannot solve instantly, like a mortgage or HELP debt, but there might be other areas you can chip away at. This could mean paying off a larger chunk of a car loan or some credit card debt.
The sooner you can put a dent in your debt, the easier it’ll be for you to set yourself up for financial success.
Bucket your money
If you’re not the best at knowing where your money is going, bucketing is a great strategy. Bucketing is done by creating several bank accounts – “buckets” – and assign each one a function. For example; buckets for savings, bills, emergencies and spending on socialising and entertainment.
It will give you a clear overview of how you’re using your money. This provides greater control and lets you identify areas where you can cut back and save more.
It’s also a good example of the advantages of doing all your banking in the one place, as it’s quick and simple to move money between accounts and keep an eye on your progress.
Set some goals
Once you’ve got a better view of your spending, you can start to think about some financial goals.
Give your goal a name, set the amount you want to reach and the date you want to achieve it by. This could be a weekly target, something several months down the track or a long-term goal you want to tick off by the following year.
Make sure you’ve got an emergency fund
No matter how well you plan, there’s always the chance you’ll be hit with unexpected expenses. When something like this happens, having some money set aside can be a relief.
As part of your bucketing, make sure you’ve got an emergency or ‘rainy day’ account. Even if you don’t have to use it, it’s great peace of mind knowing it’s there in case something happens.