9 Best Money Tips Ever!
1. Figure out your net worth
Would you start a diet without knowing your weight? Of course not. So begin your financial planning by determining your net worth. It’s what you own minus what you owe. Simple enough, but fewer than half of Aussies can even approximate their net worth.
2. Save in your Sleep
Instead of thinking about how much you’ll need to reach your goal, estimate the maximum amount you could possibly save each month. Then set up automatic payments from your wage toward your goal. If you find you need more spending money during the month, you can always adjust.
3. Take a salary cut
The cash you don’t see every month can only help you. So if you are in the Public Service, pay extra into Super. The government will match it. If you’re not paying extra into super, commit to paying extra off your home loan each month. What you don’t see you won’t miss.
4. Pick your investments
Keep it simple. Don’t get too fancy. Managed funds or blue chip stock is a strong bet; also standard residential property is hard to beat. They’re a solid, unexciting choice, which means they’re perfect.
5. Limit Credit Cards
This seems obvious, but it’s so important for young people. The world is overrun with credit card vendors, and they will try to lure you in. Big mistake. Use one card and pay it off every month.
6. To Save money: make fewer withdrawals
Some men tend to toss receipts, use all their cash and hit the ATM again and again, says Cheryl Sherrard, C.F.P of Rinehart Wealth Management. Save your ATM receipts for a month, subtract 20% from the total and use that as your budget for the following month.
7. Start Talking – Early
Money talks don’t begin with marriage or even when you move in together. They should start before you move in together and before you walk down the aisle, and then continue as your lives change and finances change. Find some entry point when you’re dating and getting serious, such as, “so, how do you manage to afford this house on your physical-therapist salary?” Paying attention to how someone manages their money gives you a clue as to what kind of money match you’ll be. Been together 10 years and still arguing? Take on a new attitude: partners in money as well as partners in love.
8. Take the long view
Finance professor Frank Partnoy, of the University of San Diego School of Law, recommends a long term strategy for retirement. With any investment you MUST take a long term view (more than 10 years) for any investment you make.
9. Slash your bills
Coofounder of BillShrink, Schwark Satyavolu, says that 80% of mobile phone users overpay for service. Not by cents either, but by an average of $500 per year. If you’re not wedded to the latest phone – can you live without your iPhone 5? – A no contract plan will probably save you big. You can get unlimited phone, texting, and web for roughly $40 a month. If you can’t abandon your gadget, you can at least save on texting by using free apps like TextPlus, IMO and TextNow. And don’t rule out prepaid – if you’re either a very light or very heavy (unlimited) user, this may be the best option for you, says Allan Keiter, president of MyRatePlan.com. Next, call your provider. Let the company know that you’ve seen its competitor’s ads and you’re thinking about switching if you don’t get a better offer. More often than not, they will pony up a ‘special promotion’ to save you some bucks… DO THIS WITH YOUR HOME LOAN TOO!
