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Trying to save money? Ask yourself these 5 questions
There are myriad reasons to cut back on spending, and according to a financial educator, these are the five key questions that will help savers stay on track.
Trying to save money? Ask yourself these 5 questions
There are myriad reasons to cut back on spending, and according to a financial educator, these are the five key questions that will help savers stay on track.
No More Practice Education chief executive Vanessa Stoykov said sometimes all it takes to improve a situation is to ask yourself the right questions.
“And if you don’t know what to ask, you can’t get a result,” she said. These are the five key questions savers should be asking themselves.
1. Is this the best deal I can get?
“It sounds basic, but we often don’t ask the question. The first suspects are your health insurance, utilities and super fund. It’s important to find out what fees you are paying, and ask the question,” Ms Stoykov said.
For instance, Ms Stoykov related, she discovered she was paying for unneeded maternity cover “long after the horse had bolted!”
“Nobody ever stopped to ask me did I still need it, and I never asked the question,” she said. “When I did, I saved myself over $100 per month – that’s $1,200 a year saved for asking the question of could I get a better deal.”
The same goes for utility bills, she continued, suggesting savers query whether there are promotions or plans to help them save.
“This can put major dollars back in your bank account, rather than theirs,” Ms Stoykov said.
2. How much can I invest in myself?
The educator explained that she works with a mindset of paying herself first. However, this can be hard, she acknowledged.
“Usually we pay whatever we need to, and whatever we have left is what we live on. This is ineffective because we are putting ourselves last – and to get ahead, you need to put yourself first,” Ms Stoykov said.
Noting that some people make sure they put away 10 per cent of their earnings prior to paying any other bills, she said it’s crucial that savers ask themselves how much they are worth and how they can invest in themselves more.
“Then open an account … that’s hard to touch and get it deducted the day your pay goes in! In a few months you won’t even notice it’s gone, and you have a tidy nest egg building up, and that feels good,” Ms Stoykov said.
3. Do I need this right now?
Usually the immediate answer is yes, but Ms Stoykov urged shoppers to keep this question in mind while out shopping, especially if they’re planning on putting the purchase on a credit card.
“If you don’t have the cash to pay for it, and it’s not a burning, critical, must have item, really question whether you need it. Because putting things on credit is just increasing the burden on you to keep working just to pay it back,” she said.
“Start thinking of how to make what you have last longer, or go further, and cut back on what you are spending on day to day.”
4. Can I get this cheaper buying online or in bulk?
The educator said convenience can be expensive, as buyers make purchases as is needed. However, by carrying out a bit of planning and research, they could save thousands.
“Google is the first port of call, and with online selling sites, and cheap bulk discount places like Aldi or Costco, thinking ahead and shopping around can save you a lot. Even buying in bulk and storing it can really work to get down your day to day shopping bills,” Ms Stoykov said.
5. What do I really want for my life?
Ms Stoykov said that while it seems like a daunting question, it’s an important one.
She explained, “By spending some time thinking about what you really want your life to be like, not just next week or month, but next year, five years and 10 years, you can start making some strategic decisions about life.”
For example, those that want to be travellers should consider how they can put more money away regularly and speed up the time in between trips.
Or, Ms Stoykov questioned, for those with their eyes on property, are there ways to live cheaply in the present or move to a more affordable area?
“Thinking long term can save you thousands of dollars making bad short-term decisions that don’t serve you and the life you really want,” she said. “This will be more fun than you think!”
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