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Tips to control spending

Take control of your finances, reduce/eliminate debt and maximise saving capabilities by keeping your spending in check. 

Not knowing how much you are spending is a recipe for financial disaster. Making a budget helps you focus on your priorities.

You could also consider opening an emergency savings account for unexpected expenses like car or home repairs. It means you won’t have to use your credit card to pay for them.

When you look at how much you earn each month and how much you need to live, you may find that you don’t have as much as you thought for things like going to movies or restaurants. You may have to cut back on spending until your debts are paid off or savings goals have been reached.

Budgeting allows you to reallocate money to the things you most want or need. Instead of spending $50 a week on bought lunches, bring a packed lunch to work on two or three days and spend the balance on a movie or save it.

Knowing what it will take to achieve your financial goals can give you a reason to control your spending. Do you need to retake control of your money by reducing or eliminating debt? Is there a ‘big ticket item’ – a wedding, for example – you want to save for?

Once you have set your goals, work out how much you need to save each month to achieve them.

Once you have a budget, set aside the money for any monthly expense you can pay for in cash – groceries, petrol, train ticket, eating out, etc. Put the relevant amount in an envelope for each spending category. Once an envelope is empty, you cannot spend any more for that category until the next month, unless you take money from another envelope.

This budgeting exercise gets you to make choices so you spend your money on what’s most important to you. Plus, paying cash helps you realise how much you really spend each month, so you tend to spend less.

To keep from spending and avoid adding to a debt, leave your credit cards at home so you aren’t tempted to use them as backup. 

Smooth your cash flow across the year by making smaller, more regular payments rather than a large annual outlay. For example, if you pay your car insurance in a lump sum once a year, consider paying the premium on a monthly basis.

BPAY® is another payment option that puts you in control of your bills. You can pay them on dates that are easier for you to manage based on when you are paid. If you know a bill is coming up, you can set up a payment in advance so you don’t have to worry about forgetting to pay on the due date.

Make sure you pay your bills on time. Late payments often incur a fee or penalty interest.

Keep track of your account balance/s and payments with NetBank. It’s free and registering is easy.

If your spontaneous spending means you find it hard to leave enough funds in your account to cover regular payments, consider opening an account for your salary to be paid into. Arrange for your regular expenses to be paid from this account. You can also pay a set amount into a separate account for your spending money.

Don’t put off dealing with financial challenges until it’s too late. If you think you are running into trouble, talk to us or a trusted advisor as soon as possible. Once you have broken your situation down into its basic elements and been shown how to rectify matters, you may find that it is easy to retake control of your money and make it work for you.

Keep reading

Have a back-up plan

Despite our efforts to plan for everything, there will be times when you need access to extra funds to pay for emergencies or unexpected bills. 

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Ways to save

No matter what you’re saving for – a holiday, a car, or a home loan deposit – we can help you get there sooner. The best place to start is with a budget.

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How to create a budget

A budget is a detailed monthly plan showing where your money is coming from, how much is there and where it goes.

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