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Just the mention of budget, money or finances can see many recoil in discomfort. But these words don’t need to be daunting. We understand taking those first steps to get on top of your finances can feel overwhelming; which is why we’ve pulled together our top four tips to help you on the way to financial fitness.

After all, its time to start looking after yourself – put aside some time to take care of number one.

Step 1: Be honest. What’s the current state of your finances?

It’s time to lift the lid on your finances and be brutally honest with yourself. You may have a general feel for your money situation by how tight your cashflow is in the days leading up to pay day. But taking a deeper dive into how you spend your money compared to how much is coming in can give you a clearer understanding and reveal things you may need to focus on.

Some questions to ask yourself are:

  1. How much is coming in each fortnight/month? –– How many sources of income do I have? When does this money come in? This gives you a baseline of how much you really earn in that period.
  2. How much is going out each fortnight/month? –– Does my spending exceed my earning? Am I pretty balanced every month? Or do I have a surplus?
  3. What am I spending my money on? –– Putting the spotlight on your spending habits may be a great catalyst to start spending less. And with modern technology, tracking where your money goes has become even easier. The Australian Securities and Investment Commission’s (ASIC) Moneysmart website provides some great insights on how to better track your spending.

Taking the time to take this first step will make your current financial situation crystal clear and provide a solid base to set yourself up for financial success.

Step 2: Cut costs by accessing better deals

Sometimes saving money is as simple as being smart about the expenses you can’t avoid. It pays to shop around to make sure you’re getting the best deals out there. Some things you may want to do are:

  • Assess your energy bills

Sure, living a pre-electricity lifestyle might help you avoid energy costs, but you don’t have to go to extremes to save a dollar. Simply compare what’s on offer and assess if your current plan measures up. If it doesn’t, contact your energy provider to see what they can do for you. If they won’t reduce the cost then maybe it’s time to switch.

Not sure where to look? The Australian Government offers a great online tool to help you find the best energy deal for you

  • Haggle with your telecommunications provider

Compare, compare, compare. Compare mobile plans, compare internet plans, compare TV streaming plans, compare music streaming plans. See if there are any packaged deals that could generate even more savings and try not to accumulate multiple TV and music streaming accounts.

  • Reduce your regular subscriptions

Do you really need that fitness app subscription you don’t use? When was the last time you used Audible? There may be a number of subscriptions you can cancel. Although they may seem like a small outlay each month, if you add them all up over a year, that can amount to a much bigger saving.

Step 3: Consolidate your debt­­ and reduce your repayments

It’s easy to accumulate debt. First you get a credit card, then you need a car loan, somehow you then find yourself with a store credit card to finance some furniture upgrades. Whatever the reasons, there’s no shame in debt. But paying multiple sets of repayments each month, with different interest rates, along with potential account fees can really add up and impact your saving capacity.

To reduce your repayment commitments and give you some more financial freedom, you can start consolidating your debts. This could be done through a personal loan or managing the debt through your home loan. Your multiple debts are then consolidated into one loan, with one interest rate, one set of fees and a set repayment amount each month over a specified term. This makes it much more manageable to pay down your debt.

Go to our Money101 Managing your credit card module to learn more.

Step 4: Start a budget and take control of your finances

Benjamin Franklin’s quote, ‘If you fail to plan, you are planning to fail’ rings true for many aspects of life, business and career, and can certainly be applied in the context of mastering your finances. A budget is a plan that articulates how you will manage your money. It can help you feel in control of your finances and enable you to plan for any big upcoming bills and set significant financial goals like buying a car or saving for a house.

Go to our Money101 Budgeting Tips module to learn more about how to setup a budget or try our Money101 Saving for your goals module to learn about how to establish good savings habits.

ASIC’s Moneysmart website is also a great source for more information on How to do a budget and you can use their Budget planner to get started.

Next step: Get started – don’t put it off any longer

Take this opportunity to start taking care of yourself a little more.

If you’re looking for more information why not check out our Money101 program – a series of jargon-free financial education e-modules, designed to help people like you better understand and navigate your finances. Its unbiased, free, with no monitoring/requires no registration and it’s something you can do at your own pace in your own time.

And, if you ever have any questions about your super – just get in touch with us.