When it comes to money, small changes may work better than big ones. There is a saying if you watch the cents the dollars will follow.
It’s because smaller bite-size changes are more likely to grow into new habits that stick. Try these small money moves to build habits that can have a major impact on your financial success.
1. Save a Little
Sure, saving a lot would be great. But saving what you can is even better. Maybe that’s $10 a month into the piggy bank on the kitchen counter, putting an extra $25 a month into your bank savings account, or adding a regular contribution to your superannuation. Small moves like this have a big impact over time.
2. Make an Extra Payment
What if you made one extra mortgage payment a year? Or rounded your car payment up to the nearest hundred dollars? A little extra here and there can mean your mortgage is paid off years in advance or your car is paid off months in advance. Depending on your mortgage loan you may have to make the entire extra payment at once rather than paying a little more each month. If you add a little extra each month the lender may not apply the extra payment to principal. Contact your lender to find out how to pay extra in a way that the excess payment reduces your principal balance.
3. Read a Finance Book
A single book can impart knowledge that will serve you for a lifetime. Even if you don’t like reading, surely you can get through one book? One great book is Behavior Gap, by Carl Richards, on how our behaviours cause us to unknowingly make unwise decisions with our money.
4. Organise
Financial stuff can feel overwhelming. A simple step you can use to make it more manageable is to get your financial information organised.
You need to know where you are currently in order to work out how to get where you want to go, and the best way to do this is to be organised!
5. Buy Used
Cars, furniture, clothing… you can almost always find what you want and pay less for it by buying used. If you get into the habit of looking for used items first you can save hundreds, sometimes thousands, each year.
6. Cancel Something
Too many of people have some type of recurring charge that is coming out of your bank account or being charged to your credit card for something you don’t even use. It might be a magazine subscription, annual membership fee, or something you signed up for accidentally. Scour your statements and make time to cancel those things you don’t use.
7. Turn Off Financial TV
One client told me that one of the things he really liked about working with a financial planner was that he didn’t watch financial TV anymore. He found life to be far more relaxing once he tuned that stuff out. Everyone can benefit from turning off the financial stock tip shows. Put a solid long-term plan in place and watch stuff that will make you laugh – not stuff that will only stress you out.
Inspired by Dana Anspach
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Disclaimer
The articles in this newsletter are of a general nature only and are not to be taken as recommendations as they might be unsuited to your specific circumstances. The contents herein do not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions.
InterPrac FP directors and advisers may have investments in any of the products discussed in this newsletter or may earn commissions if InterPrac clients invest or utilise and any services featured. Your InterPrac FP adviser or other professional advisers should be consulted prior to acting on this information. This disclaimer is intended to exclude any liability for loss as a result of acting on the information or opinions expressed.
