How to Get Ahead When You’re Stretched
We all know what it’s like to feel financially stretched – like every dollar counts and your finances are quickly sliding out of control.
But if that’s you right now, take a deep breath and don’t panic. There are practical steps you can take to get back on track.
Our co-founder Darlene Neu recently shared some tips in CommBank Brighter Magazine Issue 15 for building your bank balance back up while improving your financial resilience and wellbeing.
Step 1: Upskill
You hear about people investing in shares or their retirement fund, but when was the last time you invested in yourself?
Studying a certificate or short course will give you new skills and could potentially lead to a new role, promotion, freelance work or even creating a side hustle.
“Financial wellbeing is about creating choice for the future and being financially resilient,” Darlene says. “The more skills, qualifications and experience you have, the more options are available.”
Step 2: Tackle Your Debt
As well as being stressful, outstanding debt can result in high monthly repayments – which exacerbates the cycle of feeling like you’re struggling.
Darlene is a fan of the snowball method, where you pay off your smallest debts first to build momentum.
“Prioritise paying off short-term unsecured debt first to save paying higher interest rates and free up cash flow faster,” she says.
It’s also vital that you have an emergency fund for a rainy day – ideally three months’ worth of living expenses, although even a smaller amount can be helpful.
“Without one, unexpected expenses can derail your plans and financial goals. Building even a small emergency stash can give you a safety net so you’re not forced to rely on high-interest debt when life throws a curveball.”
Step 3: Do the Maths
Financial wellbeing starts with gaining clarity around where your money is going, and there are plenty of ways to track this – whether you prefer a spreadsheet, an app, or a more analogue method.
However you do it, “reviewing your bank statements monthly or quarterly helps the numbers sink in, giving you a better overview of incoming versus outgoing money,” Darlene advises.
Step 4: Put Away the Little Extras
Once you feel informed about where your money is going, you can get a clear picture of how much you have available to spend and save.
“Even if it’s just a little amount, setting up a regular transfer to a separate savings account can really add up over time,” Darlene says.
And remember that the cash you save will go towards building future security – which means “future you” will thank you for it.
Head to page 32 of Issue #15 of the Commbank Brighter Magazine to read the full story.
P.S. Want to know more about making your money go further? Read our article How to Set a Realistic Budget.
Blog article by:
MEL PEARCE
Financial Wellbeing Consultant and Co-Founder
The Money Collective