5 tips to streamline your money management
Here's how to work smarter, not harder, to streamline your finances and save you time and money along the way.
Sponsored by ANZ Plus - smart, secure and designed to build better financial habits, ANZ Plus can help you take your financial wellbeing to the next level.
Even if you feel like your finances are under control, most of us could benefit from using a few simple money management tools and techniques. Whether you've recently started to build up your savings or you're looking to level up and begin investing or building your wealth, there are tools available to save you time and money.
Here are 5 ways to help streamline your money management and improve your financial wellbeing.
1. Don't try to track your spending yourself – use an app for that
Are you trying to keep tabs on your spending by entering your transactions into a big, ugly spreadsheet? Or perhaps you're simply keeping a mental scorecard for your monthly spending? Sorry to say, but you're making life harder for yourself.
Why try to keep track of your spending yourself when there are plenty of apps that will do it for you? If you don't want to download another app, look for a bank account that has an app attached with these money management and budget tools instead.
One example is ANZ Plus, which offers a linked everyday account and savings account with savings tools and features to track your money. The ANZ Plus app keeps an eye on your spending from your everyday account and categorises your transactions, so you can easily see where your money is going. This can also help you see where you might be overspending. The app will also show you predicted upcoming expenses, based on your previous regular transactions.
2. Create a budget that works for you, not everyone else
If you're struggling to stick to a particular budget strategy, it's probably not the right strategy for you. If you're continually breaking your budget and feeling like you're failing, you're never going to be motivated to stick with it.
When you're deciding on a budget plan, ignore what your friends and colleagues might be doing and choose something tailored to your personal spending and finances. Also, make sure it's realistic. Otherwise, you're setting yourself up to fail.
For example, the 50/30/20 budget strategy is a popular choice as it's easy to apply and follow. This sees you allocate 50% of your income to essential living expenses, 30% towards non-essentials and 20% towards savings.
However, if you're on a low income, working part-time due to study commitments or living in a major capital city, you might find you're spending more than 50% of your income on living expenses. This is okay. Simply adjust the number to something more aligned with your finances and continue to tweak this as your income changes. The best budget is one that you can easily stick with.
3. Use the dollar-cost-averaging strategy to invest
Whether you're new to investing or a seasoned trader, no one can perfectly time the market. If you've been dipping your toes in the stock market only to find you've lost money, don't take it personally. Shares are volatile in nature – up one day and down the next. This is especially true if you're buying individual stocks instead of something like an exchange-traded fund (ETF).
Dollar-cost averaging allows you to streamline your investing by following a regular buying pattern. Instead of investing a chunk of money at a particular time, you continually invest smaller amounts over long periods.
For example, instead of investing $10,000 into an index fund in one go, you can set up a recurring investment of $100, $200 or $300 a month (or whatever you can comfortably afford) to gradually grow your investment over time.
This gives you a more accurate "average" price of the stock or fund over the long term and takes a lot of the stress and emotion out of the process.
4. Set a recurring date to compare your products and services
When was the last time you compared your savings account rate? How about your super fund or energy plan? Financial products and services are changing all the time. What was considered good value or competitive one year could be far from it the next.
Set yourself a date to review all your financial products and make sure you're still getting a good deal. This could be once or twice a year. Yes, it's not the most enjoyable task to do. However, it'll only take you an hour or 2 and could save you hundreds or even thousands of dollars.
5. Automate as much as you can
The key to making your finances as streamlined as possible is to automate everything you can. Think of your regular payments like your rent or mortgage, phone and Internet plan and set up automatic transfers for these. Think about your savings and investing goals and try to automate these as much as possible too.
This could mean setting up a regular monthly transfer into your savings or investment account. Or if you want to contribute a bit extra to your super, set up an automatic salary sacrifice arrangement with your employer so you don't need to worry about making the contributions yourself.
You can automate almost anything. Doing so is perhaps the easiest and most effective way to work smarter, not harder, with your money management.
Sponsored by ANZ Plus - smart, secure and designed to build better financial habits, ANZ Plus can help you take your financial wellbeing to the next level.
