7 Tips to being more financially in control
February 2022 Newsletter.
At Square Penny we are always looking for ways to make our clients lives easier and more efficient, hence why we created these 7 tips.
1. Simply Budget: Keep it simple by adding all your monthly bills and expenses to one tab on a spreadsheet and your income on another tab. Then subtract your bills and expenses from your Net income and this is the number you need to start working with.
2. Planning: Know what you want to achieve and where you want to be financially in 12 months, 3 years and 5 years? Do you have short-term goals like a holiday? Are you looking at expanding the business or buying a property?
3. Create a Debt Reduction Strategy: Where can you reduce your bad debt ie/ credit cards or car loans? Make a list of all your debts and monthly payments. You want to know what you can afford to pay off each month while still being realistic.
4. Establish a Savings Plan: Now you know what you earn, what you spend and what debts you need to pay down, work out how much you can realistically save each month. Put this in a separate account so you’re not tempted to touch it for so called “emergencies like dinners out”.
5. Set up an Emergency Fund: Put money aside for things like illness in the family, loss of job, downtime or higher expenses like insurances. Industry standard is to have saved least 3 months of living expenses.
6. Invest Wisely: What type of risk are you comfortable with and do you know where you want to invest your money? Can you make extra contributions into your Superannuation? Before you start investing, obtain good sound advice and make sure you are comfortable with your investment strategy.
7. Review What You Do: Do you have consistent bad financial habits? Has anything cropped up that you didn’t expect? Could you save more money or cut down on expenses? Is there room for a small reward as well? Budgeting is not just about restriction; it is also about lifestyle.