Let’s talk about your financial situation. If your response to that statement wasn’t what you’d hoped it would be and you’re not sure where to begin – let’s take a look at how we can get you back on track.

Improving your financial position isn’t necessarily about having a big budget, huge amounts of time and teams of people dedicated to planning. Sometimes all it takes to get back on track is a few minor tweaks here and there.

And now we’ve well and truly crossed the half way mark in the race to the end of the financial year – there’s no better time to begin evaluating your situation and set your sights on financial success for the FY2015-16 calendar.

There are a number of basic elements to understand in order to achieve your financial success – so we’ve compiled a list of the top three tips to get you there!

Understand where your money is going

The first step to getting ahead is, of course, knowing where you’re going. Your financial goals can be translated into a series of milestones to be achieved over time. For example, you might want to set aside some money for that holiday house you could retire to or if you’re in business – achieve profits in the next financial year. However large or small the goal, it is essential to know where you’re headed, to be able to establish the route to get there.

Keeping good records not only means less stress at tax time and avoiding that scramble to find those receipts you’d put aside for income tax deductions – but it means you’ll be better able to plan. Lack of record keeping can lead to bad decision-making. That’s why setting up a system – something as simple as a personal (or business) balance sheet now, will save you stress in the long term and possibly save you money too.

 Spend less than you earn

It seems simplistic, even obvious, right? Many people struggle with this easy principle and it is one of the most essential to your success. Of course, earning more might look like the answer. Research has shown that the more you earn, the more you spend, so let’s address that habit now, so that in the future, the money you earn becomes the money you save.

The best way to go about this is to spend less. A little cost-cutting doesn’t necessarily mean making big sacrifices. There are four easy steps for getting started on spending less:

  1. Know your outgoings – go through every monthly bill and eliminate any unnecessary optional service extras wherever you can.
  2. Keep track of your spending – through  the process of writing down all of your expenses, you’ll soon find yourself steering away from unnecessary purchases
  3. Look carefully at your routines and habits – while you are keeping track of your spending, consider the things you are doing each day that cost you money and how you can decrease that spending. Think – by cutting back on just two takeaway lunches each week (let’s say they cost $10 each – and that’s probably conservative), you’ll save more than $1000. That’s a pretty quick win. You’ll find that there are plenty of these sorts of things that you can trim without feeling the pinch.
  4. If saving on your budget is important, think about the difference between a “need” and a “want” – do you really know the difference? So, yes, you do need that car as a safe means of transport to work, but do you really “need”the leather interior?

Have a savings plan in place

One of the most beneficial forms of saving can simply be managing your banking accounts more effectively. Set yourself an objective – of say, 5% of your weekly income – to be automatically deducted from your pay as soon as you receive it, and deposited into an interest-bearing savings account.

Now some of you are thinking 5%, really 5%? What will that do? But by starting small you’ll barely (if at all) notice it missing and you can increase your savings slowly over time. But you want to do it in a way that you don’t have to keep dipping into it to pay for your cost of living.

To help identify your savings goals and see what you could accumulate over time.

Cement it in place with a little bit of dreaming

Now you’ve seen some extra cash in your future, imagine yourself paying off that debt, walking through that dream holiday home or retiring having reached $1million in the bank. Once you can see the results (not just the sacrifice) in your mind’s eye, it will be soooo much easier to keep on track.

If you could use some extra help with managing your finances and preparing a plan for your future, we’d love to help! You can call Kerry on 6023 1700, drop us a note or connect with Kerry via LinkedIn.

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