Loved this article by Melissa Browne (accountant, adviser, author and shoe addict) in The Age.
Thought we would share in full – as everyone loves a life hack, and finance and money are as important as all the other life areas!
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Generally life hacks are based on fitness, wellness, technology or cleaning but what about finance and money hacks? Following are twenty of my favourite money hacks that if adopted could potentially save you thousands of dollars every year. None of them are rocket science but if you adopt even a few of them, you will notice a big impact on your bank account by the end of the year.
1. Take your cards out of your wallet. All of them. Instead bring cash for your lunch or your coffee. That way you cannot be tempted to buy anything else in your lunch hour because you cannot pay for it.
2. Shop your loans around. Each year, shop your loans around for a better interest rate and if you find one, take it to your bank and ask them to match it. (Elkins Finance can can this work for you!)
3. Pay yourself first. You have probably heard this one before but are you doing it? If not, set up an automatic transfer to make sure the money for your savings is the first thing that is paid.
4. Keep your savings in an offset account. If you have a mortgage, you will save more interest by keeping your money in an offset account than you will in a savings account. Plus you will not pay tax on it.
5. Pay for tax deductions on your card. That way if you lose your receipt, the bank statement is proof of the deduction.
6. Pay down debt using a zero-interest credit card. If you are not paying off your balance at the end of the month then apply for a zero interest card and transfer your debt. Then do yourself a favour and cut up both cards.
7. Buy property in an SMSF. When you retire the rent may be tax-free and when you sell the property after retirement the capital gains may be tax-free. That’s win-win.
8. Pay down your bad debt first. Maximise your tax deduction by keeping your good debt (investment loans) as interest-only loans and pay the extra amount on to your bad debt (home mortgage).
9. Unsubscribe from online shopping sites and delete your credit card information. Nothing destroys your willpower faster than having a sale pop up in your inbox and your credit card details are saved and ready to go. Instead, start shopping on your terms
10. Do a financial detox – 30 days with no spending. This is designed to break your unconscious spending habits and help you set up great saving and spending patterns. It works best if it is done twice a year.
11. Cook. I once heard a nutritionist say that more time in the kitchen means less time at the doctors, dentists and therapists. I would add that it also means more money in your bank account.
12. Shop at farmers’ markets and online with a grocery list. Cut out the middle man, pay less and watch how much longer your fruit and vegetables last when you buy them directly from the farmer. Plus shopping online with a list saves you from impulse buys.
13. Share and rent. For anything that is not going to increase in value do not buy – share instead. There are many online where sites you can do this now and there are many ways to do it – sharing everything from holidays to clothes to cars to lawnmowers.
14. Teach your kids about money and say no. Teaching your kids great money habits now will save you money because you are not always giving in, and you are also setting them up for a great relationship with money for the long term.
15. Embrace the cloud. There are so many cheap or free sites to help you with your finances. From the free Money Smart site through to banks giving you details on your spending patterns via internet banking. If you have a business make sure you don’t miss out: check out Xero, Commonwealth Bank’s Albert app or for a great, cheap one-stop solution head to St George’s My Business Connect
16. Renegotiate monthly payments. It is the regular small monthly amounts that add up to an annual large amount. Negotiate payments where possible or cancel them completely if they are unnecessary.
17. Buy a quantity surveyor report for your rental property. If your investment property is less than 40 years old you could be missing out on thousands of dollars every year by not organising this report.
18. Travel in the off-season. There is a reason why it is more expensive to go away at Easter and Christmas so do not travel during these peak times and if you do not have to travel during school holidays – then don’t.
19. Build multiple streams of income. This does not mean a second job any more. Instead it might be share trading, properties, online businesses, consulting, blogging or importing and selling products.
20. Manage electricity costs. This is one of the biggest bills and there are so many ways to reduce it. Drop your airconditioning to 20 degrees, turn off any machines not used, switch to energy efficient light bulbs and air dry clothes instead of using a clothes dryer.
Life hacks – they are simply creating better habits. After all, it is the small changes that are the easiest to make and when combined with other small changes, are the ones that make the biggest impact.