Whether you’re a single mum, just beginning your financial journey, or looking to build on and protect your household’s income, it’s never too late to brush up on your financial literacy.
In Australia, fewer girls are taught about investing and being money-smart than their male counterparts.
What you get taught as a child is out of your control; what you choose to learn as an adult is entirely up to you.
So, if you didn’t learn how to manage your future or current financial wellbeing, or are merely looking to brush up on the topic, here are four tips to help you out.
1. Track your every-day expenses
The best thing you can do for your financial wellbeing is not turning a blind eye to your day-to-day expenses.
Life gets chaotic, and bills can pile up – electricity, internet, mortgage, gas – don’t pay them off blindly. Work out the total of these regular monthly payments. This total cost is the minimum amount required to maintain your household. It is the minimum amount of money you need to put aside for the bills. If you think this minimum is a rip-off, shop around, find better plans that work better for your household.
Once you know your minimum, budget for your other expenses. How much do you need weekly for groceries and fuel? What about irregular costs like school fees, car registration, or events such as Christmas? Planning is the best way to remove money stress from your shoulders. Planning also allows you to determine how much remains in the budget for fun stuff like the movies or trips away. Organisation is your ally, befriend it and see what it can do for you.
2. Set your goals
Is there something you’d love to do? Are you sick of your dull kitchen and want a renovation? Do you want a car upgrade? Maybe you just want to take your kids on that trip to Dreamworld? Setting financial goals can bring these ideas to life.
It’s a simple process. Work out how much you need for your goal and when you would like to achieve it by. For example, let’s say you want a $15,000 car and you would like to buy it in two years. $15,000 divided by 24 months means that you need to be putting away $625 a month for the next two years. Whatever your goal, breaking it up into small monthly payments that you can set aside into a separate savings account is the most efficient way to build funds.
However, keep in mind you can get some financial help with larger goals if required. Which may be useful if your car is experiencing frequent mechanical issues and won’t last for two more years.
3. Reduce your taxes
You would’ve heard that old saying before, the only things guaranteed in life are death and taxes, and whilst you can’t do anything about death, you can reduce your taxable income. Reducing your taxes may not save you a lot, but it’s far better to redirect where that money goes, to causes more worthwhile to you.
Aim to claim all possible deductions. Do you have a personal vehicle that you also use to get around in for work? Claim a deduction on it. Are you doing extra study related to your job? That may be tax-deductible. Do you use specific tools for work? See if you can claim some money back for them. Do your research, figure out what you can do to decrease your tax.
Other ways to reduce your tax is through charitable donations or increases to your super fund. In Australia, any gift to a charity that exceeds two dollars is tax-deductible. Whenever you donate, all you have to do is ensure you get the receipt. Salary sacrifice super increases do not incur tax. Increase the amount of each paycheck you are putting towards your super. Taking advantage of this will decrease the tax you pay and increase your future wellbeing.
4. Be prepared for emergencies
It would be naive to assume that a financial emergency could never happen to you. Sometimes bad things happen at the worst times. The best way to combat this is with an emergency fund. Create a separate account and automate your account to transfer as little as $10 a week into it. Over time this money will amass, meaning if you encounter an emergency, there is an extra fund you can dig into to get yourself out of a challenging situation.
Hopefully, you never have to use this fund, however, it will provide a small piece of mind. It doesn’t even have to be for severe problems like a health emergency. It could merely be a busted pipe in the middle of the night when you’re between paychecks. Anticipating issues before they happen and being proactive about the possibilities, is far smarter than assuming it will never happen to you.
It’s OK to ask for help.
Sometimes, despite your best efforts to think ahead, things don’t go the way you were hoping. Don’t put your head down and fault yourself; you’re stronger than that. Instead, read up on the possibilities of using personal loans to get you by.
Requiring a little loan isn’t a financial failure; it’s just a stepping stone to re-establishing your financial wellbeing.
If you would like to know more about small loans, click here.
Your finances don’t need to be an uncomfortable topic, and they certainly shouldn’t be foreign to you. This information is only basic but hopefully, it motivates you to broaden your financial horizons. So, ladies, educate yourself and conquer the money hurdles facing you.