Financial advisor and author Victoria Devine believes looking after your finances is the ultimate form of self-care, and she’ll tell you exactly how to do it.
One thing I love to tell my clients [as a financial advisor] is that looking after your finances is the ultimate form of self-care. The sooner you take care of your money, the faster it will be able to start taking care of you.
Essentially, the goal is to create assets that help you feel safe and secure, and give you the freedom to say no to any place, situation or relationship you don‘t want to be in. One of my all-time favourite sayings is, ‘If you live fake rich now, you’ll live real poor later.’ If the people surrounding you seem better off, remember that they may have debt, privilege or both.
When it comes to spending more than we earn, it’s easy for people to assume their situation will improve in the near future. I’m constantly peppered with excuses or reasons like: I’ll make more money next month. I’m getting a bonus. This will be the last holiday I take for years.
Here are my savings tips, tricks and hacks to help you improve your financial situation. Remember, it only takes $27.40 a day to spend $10,000 in a year.
1. Make your money less accessible
Depending on your relationship with money, you might be able to save more money if you have hurdles in place that prevent you from making impulse purchases. If that means banking with two different banks, do it.
If it means cutting up a debit card, do it. If you need to take your digital wallet off your phone or watch, do it. If saving is an issue for you, go back to your budget and cash flow allocation to create a system that won’t let you fail.
2. Hustle and hustle hard
Just because your internet provider sends you a new modem and slides an extra charge onto your bill doesn’t mean you have to accept it. Same goes for your insurance renewal. Do an annual review of all your services and insurances to make sure you’re getting the best rate possible.
This should be done for your banking products as well. Are you being treated as well as their new customers? Have they changed their ATM fee policy? Is a competitor offering a better rate? Call them and ask them to match or beat their price. Every year is a new year to check in and make sure you are in control of where your money goes. Things to review: mobile phone plan, internet package, energy provider, health insurance, mortgage, streaming services.
3. Reduce your living expenses
If you’re renting, stay up to date with real estate prices and don’t be afraid to renegotiate your lease. One of the questions I get asked a lot is: What percentage of my income should be going towards my rent? This definitely depends on where you live and the lifestyle costs of the city, state or town, but I never want to see someone spend more than 30 or 40 per cent of their income on rent.
If you want to live in an apartment that costs you 70 per cent of your income, saving is going to be really hard for you. Ultimately, it comes down to your goals.
Here are other things to consider: Think twice before adopting that insanely cute puppy, look for government rebates and health care schemes, meal plan, put time between you and your purchase, ditch takeaway coffees, tackle your transport, create a capsule wardrobe, make outfit-repeating sexy, sell your used clothing or organise a wardrobe swap with friends, change the way you socialise.
4. Pretend the money didn’t exist
I’m not going to lie – this tip came from my dad. From the time I earned my first pay cheque (when I was around fifteen) my dad told me, save a small percentage of every pay and pretend it never existed. As your salary increases, increase the amount. Obviously, this is easier earlier in life – before kids, mortgages and other expenses.
5. Understand your partner’s money story
As you begin to live life with your partner, it’s important to understand their money story, values and goals. It’s scary to think about, but if they have a negative money story or bad spending habits, this could potentially become part of your money story.
This is an edited extract from She’s on the Money by Victoria Devine (Penguin Random House, $32.99), out today (June 16).