There are various ways that we all try to save a couple of dollars here and there, but somewhere along the line we end up falling off the saving bandwagon making us lose sight of the goal we initially started off with. 85% of Australians end up breaking their financial resolutions to save due to various reasons. Managing our finances is tough act to follow, but with these five saving rules you can improve on your chances of saving.
Set up a target
Having no set target is similar to taking a trip with no destination. You could wind up going in circles and always ending back at square one. Before you open an account or already calculate how much you are willing to subtract from your hard-earned cash you need to ask yourself what you are setting the target up for? Questions such as what you are going to use the money for once you have reached your target will give you the needed drive to obtain your goals. ASIC revealed interesting data which revealed that 17% of Australians stopped saving because the target was unattainable. When you set up a target you need to make it something that is attainable and within your financial reach.
Set your own credit limit
When you take out a credit card it usually comes with a limit that you cannot exceed. Although you have access to a certain amount on your credit card doesn’t mean that you have to swipe until you almost reach that set amount. For example, if you are given access to 80% of your credit card before you reach your credit card limit set another limit where you only use 30 or 50% of it. It is good to keep in mind that your credit card comes with interest, and if you fail to meet the repayments because you exceed your limit you will pay more.
Is your card the right card for you?
Credit card debt in Australia is a crisis that continues to rise, and unfortunately with various offers screaming for our attention to clear debt we fall for the wrong card that digs us deeper into debt. A sure-fire way to ward off credit card expenses is to constantly be informing yourself of its features and interest rate that you are paying. A one percent difference in interest rate can send some credit cards out of the affordable zone into something that is unaffordable. Your power lies in comparing credit cards and finding the best competitive value for your money.
Balance your expenses with a balance transfer card
Some Australians find themselves in the red due to unexpected expenses or changes in their financial situation. This has caused 41% of Australians to end up breaking their financial resolutions to save. When placed under pressure you can end up placing large purchases on your credit card which can cause you to foot a hefty bill at the end of the month. Balance transfer cards are now flooding the market to help Australians deal with debt by consolidating it with a card that has a low interest rate. However, if you decide to use a balance transfer card you will have to check its fees and features to see if it is something that you can manage and work with.
Avoid the urge of whipping out your credit card to pay for expenses that you don’t really need by setting up a system that works for you. An example is the 30-day rule that can stop you from buying flashy items that you will regret buying later. You write down an item or items which you think of getting, but instead of going out to get it you must wait for thirty days.
Once the thirty days have passed you review these items and see if you still need them. Other people choose to open a savings account and deposit the price of the item they wanted to buy into the savings account which delays gratification.