1. Automate whatever you can
Automate your savings, automate your loan repayments, and automate your bills.
The fewer steps you have to make to move your money to where it needs to be, the more likely you might stick to it.
The great thing about automated savings and repayments? Ideally, once it’s set up, there are zero steps for you to do each month. You can set and forget.
2. Have specific, meaningful goals
It can be hard to stick to your savings budget, especially when you have to give up on yet another thing to make it happen.
But you’ll likely feel less of a twinge when you have to skip that extra drink when you remember the money’s going towards something you really want.
Whether it’s a holiday, a house, retirement, or even a less responsible-sounding purchase such as a flash new tattoo, it’s great to have a goal.
3. Create a Spending Plan & Budget
If you are spending more than you earn, you will never get ahead—in fact, it’s a sure sign that your finances are headed for trouble.
The best way to ensure that your income exceeds your expenses is to track your expenses for a month or two and then create a budget. It can be a very simple budget, but you should have one.
4. Pay Off Debt and Stay Out of Debt
One of the best things you can do for your finances is to pay off your debt. To get started, focus on your most expensive debt—the credit cards and loans that charge you the highest interest. Once you have paid off all of these debts, focus on paying off your mortgage.
Consider splitting your monthly payment in half and paying bi-weekly for your mortgage. Then pay extra as you can afford it. This will shave years off your mortgage and save you tens of thousands of dollars in interest.
5. Don’t spend that unexpected cash
Tax refund? Inheritance? Birthday money?
As tempting as treating yourself, you might be better off tucking that extra money away in a savings or investment account or putting it towards your debt.
After all, if you weren’t expecting to get that money, you won’t miss it. And your financial goals will thank you!
6. Sleep On It – Don’t Be Hasty With Big Financial Decisions
No major financial decisions or major purchases need to be made on the spot. In fact, being pressured into making a hasty financial decision is one of the warning signs that the deal might not be as good as it seems.
All worthwhile opportunities will be there another day if you are patient. It is better to wait and learn a cheap lesson than hastily rush into something and learn an expensive lesson.
When you take the time to sleep on big decisions, you have time to consider alternatives, evaluate whether you really need to do this, and probably get some other opinions or information. These are wise things to do every time you make a big decision, especially financial decisions.
7. Learn however you can
Finance, investing, and optimising your finances generally? Well, they can seem a bit scary.
Rather than waiting until you need to know something specific — oh God, what’s the best way to set up this investment property, so I don’t lose everything to tax? — start consuming information earlier on. Whether it’s books, blogs, podcasts, or videos, find a few you like, and let your brain start absorbing the information.
Over time, you’ll develop a general understanding of how things work, which will make your research and decisions easier when the time comes.