We’ve been coming at you hard with Getting Lean in 2019 these past few weeks (except for the week of the Royal Commission! Which – By the way, if you would like to sign a petition pledging your support for brokers and the excellent work they do – please check this out, sign the link. We appreciate it!) and it’s time to do a little re-cap. Take a look at what we’ve covered, and what you need to do next. 2019 is well and truly underway!
Not Just Rainy Days
Ok, up until now, we have discussed how to minimise your outgoings – making sure you are not paying more than you should for things. We also discussed ways to tackle that out of control debt, reign it in and start making serious in-roads to getting you out of that unnecessary debt. We even spoke about budgeting – everyone’s favourite eye-roll – and how to set yourself up for success.
Now that we have covered off where to save, how to plan, and how to set the money’s up – It’s time to talk about what to do with the leftovers.
We are not talking about investing here – that’s above our pay grade. We are talking about savings. True savings. What to do with the leftovers? Where does that go and why? Let’s go back to that fictitious $5000/ month pay from last week. Let us suppose, that after implementing some strategies, identifying certain deleterious spending habits, you now find yourself with $1000/month leftover. Rejoice! What to do with it all?
You might think – hey, if all my bills are paid, the family is fed, my costs covered, and my fun-needs are being met – then I can do what I want!
But let’s get real, while that $1000 is fantastic, it needs to grow to become effective. It’s probably going to cover the cost of only one unforeseen incidental bill. It’s certainly not a house deposit. You need to bank more of that up, gather it in and have something that you can use for whatever it is that is driving you to save in the first place. Particularly if you now don’t have a credit card to fall back on.
There is something very powerful in knowing that everything is covered – every base, every cost, every bill, expense (even the fun ones) and you have lots of money sitting squarely behind you. Available funds are king in this instance. Where that spare money goes is entirely up to you – as is how it gets there. Remember we are looking at this from a very general perspective. How this works for you, is up to you.
Leaving those leftovers where they are, in the same account that all transactions run through might be pretty risky if you are susceptible to excessive spending. Maybe you want to have a separate account, with an automated direct debit payment that moves the money from the primary account for you (big tick), making it easier for you to manage your savings target. Maybe you have a few of these accounts, functioning the same way with various amounts moving around according to your needs. Whatever works for you.
Maybe you put it into something the helps it grow while it sits there – again, this is not our space to play in, but there are plenty of ways to strategise for this if it is your goal.
Getting Lean in 2019 is really about, not just living a more frugal lifestyle, not just about reducing the debt to only what is really necessary. Getting Lean in 2019 is about giving yourself more for the future. More freedom, more options to do what you like with what you have worked hard for.
We will leave you with this:
The top 1% of Australians richest own more wealth than the bottom 70% combined.
(source: as estimated by Oxfam in this article)
Now we won’t get into strategies that the 1% may have employed to amount so much – that’s not our place. But the truth is that if you are not in control of your finances – if they indeed dictate your life to you – then you are not helping yourself to a better life.
If you want to talk more about how you can re-shape your finances, get yourself on track, or just talk about budgeting spreadsheets – just give Pete and I a call!
(And thanks again for signing the petition!)