Are you a matchmaker for your finances?
Budgeting and regularly reviewing your cashflow can be likened to being a matchmaker. It introduces your income to your expenses and in doing so, you soon identify any matches, differences and of course any gaps.
This is important as it can enable you to meet your current financial obligations as well as plan for future expenses, such as travel, building an emergency buffer, purchasing a home, paying for education or building wealth for the future.
If your focus is building financial wellbeing, then becoming a matchmaker and understanding the flow of money is going to be key. This is why Savings & Budgeting and Income form part of the Wealth Foundations in the 9 Wealth Maximiser building blocks.
Knowledge is power. As the matchmaker, the more knowledge you have the stronger the relationship, and this is where budgeting plays a role – look at it like the first date of getting to know each other. Your budget (app, excel or written down) becomes the benchmark and provides an opportunity to see where you’re at and what surplus income you have to put towards your goals. Like any relationship, make sure you’ve factored in some money for fun!
Next up is the ‘getting to know you’ part – which is undertaken through a cashflow review. Here you’re able to check in and see what you want to retain, reduce or remove (think subscriptions and memberships you might not be using).
Regularly review your cashflow. This continues to deepen the relationship you have with money and allows for further refinement. It’s also a great way to identify what spending habits you may have and what might be unhelpful (eg. increasing credit card debt or buy now pay later balances). Remember, small purchases add up e.g. 2 coffees per day at $5 each = $3,650 p.a.
Here are some helpful tips:
- Set up your budget – Schedule in a money date to get this set up, the more detail it has the more clarity you’ll have on directing your money and feeling in charge of your finances. Have at hand copies of your last 3 months of bank statements and/or any bills to support you in completing this.
- Set regular money dates – Use these to check-in with where your money is going and update your budget accordingly. Consider contacting different providers to see what better deal they can offer you on your bills. Don’t be afraid to shop around.
- Automate – Simplify your money management process by automating any transfers of money and bill payments.
- Give your money direction – Don’t underestimate the power in getting to know your numbers! Money loves direction, so direct it to where you want it to go.
Seeking more guidance and support? Working with Wealth Maximiser can help you to get clear on where your money is going and how you can take back control of your financial situation. Wealth Maximiser provides you with a personalised Statement of Advice that includes actions steps to move you towards achieving financial wellbeing. This is supported by a Wealth Coach who can provide more detailed guidance and additional accountability where required.
“Spending money to show people how much money you have is the fastest way to have less money.” ― Morgan Housel, The Psychology of Money
Disclaimer
This information is of a general nature only and does not take into consideration your objectives, financial situation, or needs. Before acting on this information, you should review the Wealth Maximiser Financial Services Guide and Wealth Maximiser Terms & Conditions and consider this information in light of your own objectives, financial situation, and needs. Wealth Maximiser is operated by NobleOak Services Limited ACN 112 981 718 AFSL 286798.