Whatever our situation or stage in life, most of us will worry sometimes about how to make our income stretch to cover our needs or aspirations, or perhaps to help others around us. Here are a few easy ways to be money smart and make your money go further.
1. Budget away those blues
It may not be everyone’s idea of fun, but budgeting can reduce that ‘uh-oh’ feeling when payments are due. The first step to budgeting is to review your regular expenses. Over the years, we’ve all gone from just a few expenses for electricity, water, rates/rent and home phone, to a seemingly endless list - from streaming services to ‘buy now, pay later’ (BNPL) platforms, mobile phone to data plans just to name a few.
There are a variety of websites where you can shop around for the best deals for your utilities like finder.com.au. There are also some great budgeting apps and software available to help you get on top of your expenses and provide handy graphs and charts to help streamline your spending. If you don’t want a fancy app, there is always excel or good old pen and paper. However you prefer to do it, having a set budget can be a smart money management strategy.
2. Smooth it out
Do you suffer from bill shock when you open your power or gas bill and wonder ‘How am I going to pay this?’ We all know they are coming but it can still sting when they do. There’s a simple strategy that most utilities offer now to help you even out your cash flow.
Bill smoothing, also known as ‘regular payment plans’ is a great option to help manage your direct debits into smaller manageable payments rather than a large lump sum. Estimate your yearly or quarterly costs and make regular instalments weekly, fortnightly or monthly. Speak to your utility provider to see if they offer this option.
3. Beware of ‘buy now, pay later’ (BNPL) platforms
We’ve all been there. You spot that bag you’ve always wanted, the latest video game, new shoes, the list goes on. Enter BNPL, where you can take your items home today and make regular payments later (fortnightly, monthly). When things sound too good to be true, we often need to be careful. These platforms can lead to bad spending habits, but the biggest draw-back can be that they tend to charge a higher interest if you don’t pay in time.
You may also be charged late fees if you miss an instalment and some will continue to charge a late fee every few days until that instalment is made, so be sure to read the fine print. If you are going to use a BNPL platform, make sure you will be able to make the required payments and opt in to receive notifications of your upcoming payments, so you can have the money available in your account.
4. Time for a check- up
When was the last time you checked your banking arrangements? We tend to set and forget our accounts and what was opened when you were younger might not suit your needs today. No-one likes paying fees, so it’s lucky that some of the most common ones can be avoided. Look for a transaction account with low transaction fees or account keeping fees, even better no account keeping fees. Check out our handy account check-up to make sure your account meets your current needs.
5. All about bills
You might consider setting up an account just to pay the regular bills, so those funds get set aside every month and you can see how much you have left to play with. A great feature in our app is the detailed transaction listing that shows the company name or logo so you can see who and what has been paid. Work out the amount you need to cover upcoming expenses like insurances, rates and quarterly utilities (like electricity, gas and water).
Set up a regular transfer to make sure you have enough funds when the due date rolls around or speak to your payroll department as they may be able to split your pay across multiple accounts.