Finance Real Estate 

Where Does Your Money Really Go?

Where Does Your Money Really Go?

How in tune are you with your bank account?  Does the thought of checking your balance fill you with dread?  Are you constantly finding yourself scraping pennies together for everything?  Then there is a pretty good chance that money management is not one of your strengths.  In fact, recent data has shown that one in six Australians are in so much debt that they will most likely never be able to pay it off, with the country as a whole owing more than $45 billion on credit cards alone!  So simply accepting that you don’t know how to handle your money really isn’t an option, unless you want to join that one in six people. 

Find out where it’s going 

The first thing to identify is where you are spending your money.  For many people, a lot of expenditure is on unnecessary things that are often bought out of the habit of laziness, such as takeaways.  There are a variety of tools out there that can help with this one, but keeping a simple list or spreadsheet of your outgoings is a great place to start.  You will quickly spot what you don’t need to spend. 

Figure out what you can spend 

Banks want you to spend money.  It is that simple.  But if you are irresponsible then you are going to end up spending all your time and money simply paying the bank back.  Many lenders, have brilliant, free tools on their websites which enable you to start planning a budget for yourself.  Start by filling in your income and essential expenses that you must pay, such as rent, energy bills, insurances etc. and then move on to allocating some of what is left for flexible amounts such as food, that can be scaled back if need be. 

Plug the holes 

Many accounts have vampiric direct debits on them.  These are old direct debits that are out of date, unused or otherwise pointless; insurance for a phone you no longer have is a very common one.  Direct debits will not cancel by themselves, so you have to either cancel them manually or contact the company that has set it up and get them to cancel it.  You are well within your rights to simply cancel it with your bank and it can save a surprising amount. 

Consolidate your debt 

If you do have numerous sources of debt from various lenders, then asking your main lender to set you up with a consolidation loan.  There are plenty of useful loan calculators on lenders websites that can help you figure out how much you could be paying if it was a lump sum rather than lots of different, often high interest, options.  This can provide a very substantial saving on interest and allow you to start getting debt under control. 

There really is no quick or simple answer to debt, but taking no action or worse, taking the wrong action, will only result in you slipping further and further down until you reach a point you cannot climb back from.  Don’t let that happen to you.  Start to get a handle on it today and work for a brighter tomorrow. 

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