- Pay yourself first
- Practice mindful spending
- Figure out what your time's worth
- Bank any bonus
1. Pay yourself first
Are you saving right? Spending first and saving what’s left is a popular approach, but not one that leaves you with a clear plan.
Paying yourself first is about keeping separate savings and transaction accounts, then automating your savings transfer each pay cycle, just like you'd do for bills. This way you'll spend after you’ve saved, which'll help your savings balance look healthier faster.
2. Mindful spending
Even once you’re paying yourself first, check in with what’s left over. If you’re not sure where your money goes, get into the habit of tracking what you spend. You can use My Spend in NetBank to help you out. It could shock you! That daily takeaway lunch could be setting you back roughly $2,000 a year. Likewise, an unused gym membership could be a couple of extra thousand into your savings account towards your next trip.
3. Figure out what your time’s worth
It doesn’t need to be 100% right, but get a rough idea of what your after-tax salary works out to be on an hourly basis. This will help you figure out how many hours’ work that next purchase is so you can decide if it’s worth it.
4. Bank any bonus
It’s tempting to splurge any cash left at the end of your pay cycle. But making a habit of saving, at least part, of each bonus, overtime, or tax refund, means reaching your goals that much sooner.