My thirties were a fabulous time of my life and I planned a big party to celebrate. I invited around 150 friends and created various rooms including a Doof Doof room, Karaoke Room, Piano Room and a Bon Fire. Let’s just say a good time was had by all. Yes, your thirties are an exciting time in your life. With a few of the big milestones behind you, you’re well on your way to higher earnings and excellent wealth creation opportunities. Making the most of your money starts getting a handle on your personal finances.
Ensure more comes in than goes out
It may sound obvious but this basic fact of money management eludes many large organisations. The fastest way to improve your money situation is to pull back on expenses. Start with spending just a little less in as many areas as you can; you’ll be surprised at the difference minimal cost-cutting can make to your personal finances. Look at some of your higher cost items too, like insurance or mobile phone and internet plans. With a bit of research you may be able to negotiate a better deal for yourself that costs you less and improves your bottom line. It might even be worth talking to a finance management company like My Wealth Solutions to figure out what areas you are overspending.
Manage credit card debt
Credit card debt is the enemy of wealth creation. Those huge interest rates and long payoff periods create obstacles to getting ahead financially. With a tightened budget you should be able to pay off a little more each month until you’re no longer trapped in the interest payment hamster wheel. Once you reach this point, make it a priority to pay your closing balance in full every month. It may be possible to take advantage of 0% balance transfer offers to help you get rid of the debt but be wary – and read the fine print. Some of these offers can actually end up costing you more because they may not include all the charges on your carried-over bills.
Do you know where all you money goes? If you don’t already track your expenses, try it for one pay cycle (usually weekly, fortnightly or monthly). You might be surprised to see how little impulse buys here and there add up. Jot down any cash purchases in a notepad or use a smartphone. This information will be useful when developing your budget.
Make a Budget – and Stick To It
It’s impossible to manage your money well without a plan and that’s all a budget is. If you don’t already have a personal budget, spend some time creating one. Be thorough; cover every area of income and expenses. Include how much you spend on gifts for friends and family, as well as expenses related to travel, entertainment, even parking meters. Remember that some bills are paid quarterly so calculate these expenses accordingly. This could also be a good time to set some savings goals.
Set aside a percentage of your income for saving – before your pay for anything else. That’s right – before paying bills or anything else. Make saving five to ten percent of your income a habit. If possible, have the desired amount quarantined from your pay into another account. You’ll be amazed how fast your savings accumulate.
These basic tips are only a start. Once your finances are running smoothly you can ramp up your wealth creation – and your lifestyle goals; that’s when the fun really starts.
What’s your number one personal finance tip? Share it in the comments box below.
The information provided in this article has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Limited (GPS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.