The 5 easy ways to simplify your finances and finally start saving.

It’s easy to throw finance into the ‘too hard basket’, but by following our five simple steps, you’ll be on your way to financial freedom in no time. 

When things are going well, finance can make us feel like we’re on top of the world and in control, but when things aren’t tracking so amazingly, it can also make us feel incredibly overwhelmed and anxious. 

If you fall into the latter camp, we see you and we’re here for you.

Money is an intensely emotional thing, but what you need to know is that your worth is absolutely not tied to the amount of cash you have in the bank. That said, financial freedom is something we all deserve which is why we want you to start taking control of your money by simplifying your finances. 

To get you on your way, we’ve collated our top five tips for simplifying your finances, to help you feel in control and excited about your money at last. 

                1. Understand your money story 

The path to financial freedom starts with reflecting on our money story and understanding why we are the way we are when it comes to finance. Your money story is often moulded from early on in life and parental influence plays a huge part here. Maybe things were tight at home when you were little so now you save every penny you have and find it hard to spend - or maybe you spend money as soon as you get it for fear it will be taken away? 

Importantly, your money story doesn’t define you, but it’s a really helpful tool that we can use to pull ourselves up if we can feel ourselves slipping into old negative money habits. 

                2. Know your financial position and establish a budgeting and cash flow system that works for you 

Keeping our heads buried in the sand when it comes to money is a recipe for disaster. To take a hold of our finances, we need to be honest with our situation and identify the money we have coming in versus going out, then set up a budget to fit. The sooner we make a plan, the better. It’s important to remember too that budgets aren’t about restriction, they’re about understanding our financial position and spending accordingly - strict $50 a week budgets (just like a crash diet) do not work because they’re not sustainable and we can almost guarantee if you take that approach you will fall off the wagon and spend more anyway, which defeats the purpose of the whole process!

3. Get on top of your bills

Bills are a part of adult life and though they can bring a lot of stress, what we’ve found over the years is that it’s not the bills that are the issue, it’s our organisation around them. Bills tend to only wreak havoc when we didn’t expect them or when we forgot about them and we’re then stung with late fees, which are both avoidable outcomes if we make it our mission to set reminders and factor them into our budget.

One SOTM pro-tip if staying in control of your bill payments is one of your problem areas, is to make the most of products like BPAY, which makes your essential life admin that little bit easier. The big pull of BPAY is that it gives you that sense of control over your finances. You can choose when, how much and from which account you pay your bills, all through the security of your online banking. You can pay your way, with the ability to schedule ongoing recurring payments, pay immediately or pay later – you just need to make sure you have money in your account. Any method of making bill payment easier is a big yes from us, so if you haven’t already, definitely check out BPAY.

                4. Set goals 

Direction is key in nailing our finances; otherwise instead of charging forward we’re just treading water. Take out a pen and paper and write down your money goals - we recommend thinking in terms of the short term (1-2 years), medium term (3-5 years) and long term (5-10 years), to reflect on how you’d like things to look at each milestone.

By writing these goals down we can see what we’re actually working towards, which enables us to visualise things more clearly, PLUS we can put plans in place to help us reach those goals. Want to save $20,000 in a couple of years? Fantastic! That means you will need to be putting away $193 per week for two years. Is that realistic for your cash flow? If not, then we can readjust to what is realistic and work from there. 

                5. Strip back non-essential spending

We’ve said it once and we’ll say it again. Probably many, many times. Spending frivolously is a sure-fire way to sabotage your savings and so it’s important we rein it in when we can. The best way to strike sneaky spending from your life is to print out a couple of weeks worth of bank statements, review your transactions and highlight every item you purchased that was not essential. Yep, that means oat lattes, online shopping sprees and those delicious after work vinos. When you see all of that highlighter you’ll know pretty immediately the areas where you need to be adjusting your spending habits!

So go on, get simplifying and start living a more financially free life – we believe in you!

BPAY is made available by over 150 BPAY participants. You should obtain a PDS from your relevant BPAY participant and consider whether BPAY is right for you.