To avoid becoming stressed about your finances, you need to identify your leakage. Leakage is when you find yourself thinking, “Where did all my money go?” or when you’re spending unnecessarily.
We all have leakage in our money. Here’s what you can do to stop this from happening:
1. Identify your Leakage. Have you ever checked your bank balance and just wondered where all the money went? This is leakage. Identify where you are spending money that is unnecessary.
Is there anything right now that you are spending your money on that you could do without? If so, could you cut out these things you just do not need? Typically, leakage could be anywhere from spending money on take out or entertainment, or even being on a more expensive phone or insurance plan that you don’t really need. Start by looking through your bank transactions and identifying the spending that wasn’t really necessary.
2. Know how to handle debt. Everyone needs to have a debt reduction strategy to pay down debt the smart way. The smart way will make sure you are paying the least amount of interest and maximise your principal reduction. If you are not sure if you are paying the smart way, contact us!
If you find yourself without an income there is also a right and wrong way to handle your creditors, where the wrong way can leave you out of pocket or drastically affect your credit rating. Again take the steps to find out the right way by calling us today for some free advice.
3. SAVE! There is no risk to savings! The best time to start saving is 20 years ago, the second best time is today. You should be saving at least ten per cent each time you get paid. If you cannot afford ten per cent then can you afford ten dollars? We suggest you also have emergency savings that covers your basic living costs for at least three months.
If you’re in the resource industry and a redundancy could be on the cards for you, you need to ask yourself these questions. Are you prepared to go a few months without an income?
Do you have realistic expectations on how long it will take to secure another job? Are you entitled to a payout? Have you discussed your situation with your partner to ensure your family is prepared for what may happen?
Communication is the key to surviving hard times; a redundancy or a change in circumstance can put a lot of pressure on you and your family and have lasting effects on your relationship.
There is absolutely no harm in savings, by being prepared you will able to recover quicker than those that are unprepared.
If you do think a redundancy could be around the corner, here’s what you can do to prepare: