Part 3: How to be a savvy saver
By Finn Dorney
In the last of my blog series on bill paying, here are some tips on how you can be savvier in the way you approach money management:
- Treat your savings like a bill – allocating a fixed amount to be set aside on a regular basis is important but often forgotten. One of the most effective savings methods is to consider your monthly savings amount as a bill. Open a separate savings account and have a set amount direct debited into your salary or working cash account. Most financial institutions offer a high yielding at-call bank account option which would be suitable for this purpose.
- Children's education costs – an easy and effective method to cover children's education costs is to divide the total annual fees by 12 and have this amount deducted monthly from your salary and directed into a separate bank account.
- General insurance – discounts are often available if you hold your car, home building and contents insurance policies with one insurer. Check with your current insurer and compare offers by others. Many insurers also offer 'pay-by-the-month' options. Be aware that paying by the month may attract an additional monthly administration fee. Check with your provider beforehand and pay annually if you can.
- Council rates – set up a direct debit with your local council so your payments are made in line with the quarterly instalment due dates. And to ease the pressure of paying larger quarterly bills you can pay your rates monthly and some councils even offer weekly or fortnightly payments. Check with your local council to find out how they can help you.
- Debt consolidation – by consolidating your credit card debts and personal loans into one facility you will not only simplify your payments but you'll also find that debts are repaid more quickly and accumulated interest costs can be reduced.
- Holidays – avoid racking up credit card debt by working out a rough budget ahead of time. Setting up a regular savings plan in line with this budget will ensure you come back with just jetlag and not a massive bill as well!
- Christmas – plan your Christmas gifts ahead of time to avoid overspending. Retailers often entice consumers through sales and discounts – but these are usually not available in the lead up to Christmas. By purchasing gifts throughout the year you can take advantage of lower prices and you may even be able to ensure you pick up the 'perfect' present by having a little more time available.
By making a few simple changes to your money management habits you may find that bill paying and other payments are no longer as unpleasant as they once were. And adopting some new habits along the way may actually save you some dollars in the long term.
Remember, better bill paying and savings practices result in better money management and potentially fatter pockets!
If you are seeking help with cash flow and money management why not get some advice from a financial adviser.
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