Pay yourself first
According to Westpac Bank’s financial guide, A Better Footing, “Paying yourself first is a great way to build a nest egg for the future, and a cash buffer for emergencies that crop up from time to time.”
Set aside a portion of your income for your savings account: many experts suggest that you start with 10% of your after-tax earnings. This amount should be whisked away to another account before you begin paying for any other “must haves” (rent or mortgage, food, electricity) or “wants” (new clothes, eating out, magazine subscriptions).
Manage your cash flow
Your budget will help you to plan where your money should go, but exactly how you spend your cash on a weekly basis is a different matter altogether. If you’re an impulse shopper and you tend to spend without thinking about it, take all of your credit cards out of your wallet before you hit the shops.
And before you buy anything, ask yourself: “Do I really NEED or really LOVE this item?” If the answer is no, then don’t buy it: you can always go back for it later if you change your mind, but odds are, you’ll realise you can live without it — and your bank balance will thank you for it.
More money management tips
How to create a household budget