When is Too Early to Start Your Christmas Shopping?

Are you ready to start Christmas shopping yet? Is it too early? Are you emotionally ready yet?

Can you imagine buying whatever you want: An iWatch, or even a new iPhone, that handbag you keep eyeing off as you walk past the store, a new jacket, or the latest sports shoes. Put it on your credit card, or split it over two credit cards, then it won’t seem as bad when you look at the statement.

We’ve all done it and it feels good. Coming home with bags of goodies, trying them on in secret, then when quizzed weeks later “When did you get that?” you retort “This old thing”. Haha, they’ll never know. Surely you’ve heard the old saying that “You live up to your income”, as your paycheque or income rises, so does your lifestyle. There’s nothing wrong with living well.

But, and there is always a But… that one-off spending spree is very rarely a “one-off”. It is addictive and gets the pleasure endorphins pumping. “Why not do it again, next week, it was fun and there’s still credit available on the card” And on top of all that the airlines are giving you reward points! Why wouldn’t you use your card?

Did you know that Australians owe approximately $33 billion in credit card debt. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reoccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically, Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

While you’re at it, have a look at your monthly credit card statement. It shows how long it will take you to pay off your balance and how much interest you’ll pay if you only pay the minimum each month. (The short answers are “forever” and “heaps.”)

So overspending once in awhile is good for you; hopefully it shows you how addictive it can be and gets you to review the financial consequences of that binge. Although a “once-off” may not impact you that much now, think about those endorphins that are working to create a monster, and there’s nothing more destructive than a spending monster.

What about all that money you are spending on short term pleasure, and could be using toward the car, or house, renovation, holiday: the big ticket items that need saving for. Shame as those would be long term memories, not just a day of short term pleasure, even if it is in the name of Christmas.

What can you do to resist the “spending-money-I-just-don’t-have” urge?

Firstly use your debit card more than your credit card. Secondly put a simple budget in place, and then you’ll know what you have to spend, and what you don’t. We like to call a budget ‘Your Spending Plan’ as that is what we are all working around: Spending.

Here’s a helpful downloadable guide to control your spending and build your savings. 6-steps to Financial Security, a Free e-book from Your Money Sense. It’s a good starting point to get you in the right mindset to manage your money.

So next time you go for a bender at the shopping centre, take a few deep breaths before walking in, and think about the long term financial goal.

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Arc Wealth Financial Adviser - Karen Vickers

Suite 20 / 6-8 Herbert Street, St Leonards, NSW 2065

Financial Security? All You Need Is 4 Buckets

If you want to build or maintain a healthy financial life, budgeting should be your fundamental starting point. After all, how can you tell you’re on track if you don’t know where your hard-earned pay-cheque is going?

Some of us, correction: most of us, will find it daunting to maintain a budget. Getting all your expenses together, tracking what should be paid and when, how much you have left for entertainment, saving for long-term goals – it’s enough to make you give up before you start. But what if there was an easier way to manage your cash-flow that didn’t require hours of sifting through receipts or crunching numbers?

There is and it’s not that hard to get started. It starts with categorising your monthly spending into four buckets:

BUCKET ONE Fixed costs. These are bills that don’t fluctuate much and remain pretty constant each week or month, or whatever period they are relevant to: things like rent or mortgage, a phone bill or your car payment. It also includes essential costs that may vary slightly from month to month, like utility bills such as electricity or water. Although they may vary slightly, you can work out an average for the purpose of this budget. But generally speaking, if you can predict how much an expense will be, it belongs in this category.

BUCKET TWO Financial goals.These include any sort of savings or debt goal you’re trying to work towards every month, whether that’s paying off credit card balances, paying down your student loans, saving for a home or paying into an emergency fund regularly, or topping up your Super on a regular basis.

~ Take the FREE Money Personality Quiz to determine your emotional attachment to money ~

BUCKET THREE Non-monthly expenses.Got a bill that you have to pay at some point every year, but just not every month? This could include your home or car insurance or for that matter, most annual insurances, car registration fees, annual health payments, and even school tuition belongs in this category. Add up what those types of costs total to each year, then divide that total by 12. That should be what you’re setting aside each month to cover those expenses when they come up.

BUCKET FOUR Flexible spending.This category covers all those everyday costs that fluctuate each month. This can include groceries, restaurants, shopping, movies, petrol and pretty much any expense that may vary month to month.

So now that you’ve categorized your costs, how much can you actually flexibly spend each month without blowing your budget? Well, that’s a relatively easy calculation. What is your monthly take-home pay? From that, subtract your total fixed costs, and your financial goal contributions, and those non-monthly expenses you calculated. The amount that’s left over is what’s available to cover your flexible spending – the daily coffees, new shoes, magazines, etc.

If you want to know what your flexible spending is per week just divide your monthly figure by 4.3, and you’ll have your weekly spending number to stick to. So if you work out the above, and stick to it, you won’t be in danger of spending more than you earn.

If you can put your hands on the numbers from your bills, it’s not that hard to work out. And if you can work to a budget each week or month, you’ll certainly be on your way to building a financially secure future. 

If you want some more great advice about securing your financial future start by finding out your emotional attachment to money and how to overcome and manage it by taking the Free Your Money Personality Quiz.

When is Too Early to Start Christmas Shopping?

Are you ready to start Christmas shopping yet? Is it too early? Are you emotionally ready yet? Can you imagine buying whatever you want: An iWatch, or even a new iPhone, that handbag you keep eyeing off as you walk past the store, a new jacket, or the latest sports shoes. Put it on your credit card, or split it over two credit cards, then it won’t seem as bad when you look at the statement.

We’ve all done it and it feels good. Coming home with bags of goodies, trying them on in secret, then when quizzed weeks later “When did you get that?” you retort “This old thing”.

Haha, they’ll never know. Surely you’ve heard the old saying that “You live up to your income”, as your pay-cheque or income rises, so does your lifestyle. There’s nothing wrong with living well.

But, and there is always a But… that one-off spending spree is very rarely a “one-off”. It is addictive and gets the pleasure endorphins pumping. “Why not do it again, next week, it was fun and there’s still credit available on the card” And on top of all that the airlines are giving you reward points! Why wouldn’t you use your card?

Did you know that Australians owe approximately $33 billion in credit card debt. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically, Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

While you’re at it, have a look at your monthly credit card statement. It shows how long it will take you to pay off your balance and how much interest you’ll pay if you only pay the minimum each month. (The short answers are “forever” and “heaps.”)

So overspending once in awhile is good for you; hopefully it shows you how addictive it can be and gets you to review the financial consequences of that binge. Although a “once-off” may not impact you that much now, think about those endorphins that are working to create a monster, and there’s nothing more destructive than a spending monster. What about all that money you are spending on short term pleasure, and could be using toward the car, or house, renovation, holiday: the big ticket items that need saving for. Shame as those would be long term memories, not just a day of short term pleasure, even if it is in the name of Christmas.

What can you do to resist the “spending-money-I-just-don’t-have” urge?

Firstly use your debit card more than your credit card. Secondly put a simple budget in place, and then you’ll know what you have to spend, and what you don’t. We like to call a budget ‘Your Spending Plan’ as that is what we are all working around: Spending.

Here’s a helpful downloadable guide to control your spending and build your savings. 6-steps to Financial Security, a Free e-book from Your Money Sense. It’s a good starting point to get you in the right mindset to manage your money.

So next time you go for a bender at the shopping centre, take a few deep breaths before walking in, and think about the long term financial goal.

If you change this habit you’ll quickly improve your financial situation?

Change your habit; the habit of spending. Firstly you need to learn how to save on small things. Saving, spending, they go hand in hand. This is probably the fastest and easiest way to improve your financial situation. We’re not always fully aware about the money we spend on certain daily habits. Habits are a very strange thing. They just happen time and time again, and generally subconsciously.  

If you put a value on each time you ‘do’ a habit it ends up costing a small fortune. If you go to the same coffee shop day in and day out: that’s a habit. Drinking coffee in a local coffee shop on a daily basis drains your monthly budget. How can you break that habit? Well that’s not for us to say, but we’ll give it a go anyway. We know you need your coffee, but just consider how it gets into the cup. Maybe pick up a home coffee machine, or get one at work, they really do produce great coffee these days and cost cents on the dollar. Try taking a bottle of water with you so you might sip on that rather than get a coffee for the sake of it.

How much electric energy or water are you using each day? It’s not one of those free resources that are just there like air, it costs money. If the weather outside is not very hot, you don’t need to use the air conditioning and vice versa, if it is not very cold you can turn off or set the heating at a lower temperature. If no one is watching TV or if no one is working on the computer, turn them off, or power them down. Make sure that the taps are turned to the end and don’t let the water run unnecessarily. Have a 10 minute shower instead of a 30 minute shower. It all costs money and if you adjust the way you do or use these things, they’ll end up saving you money.

This has nothing to do with skimping – it’s just a case of thinking what it is costing you unnecessarily, and then adjust your habit. By cutting down on some of those habits, you’ll have reasonable savings by the end of a few months.

No-one is saying “don’t do that anymore” but if you’re honest with yourself you know there are many, many, more “habits” that you could adjust. A slight adjustment will save you a lot of money over the course of a month.

So do you know what the fastest way to improve your financial situation is yet? Habit: Change: Adjustment: Realigning; any of those will cover it.

What habit do you need to change?

A good start to understanding the habit change process is by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

Are Your Financial Habits Normal?

Each day you get up and shower, get dressed, have breakfast, feed the pets and go to work: or something like that. That’s normal for you but it doesn’t mean it’s normal for the next person.

Did you know that when it comes to your money, there is a normal too? Your money normal encompasses your ability to pay your bills, educate your kids, buy a home or retire in comfort and security. That will change for everyone.

So how do you define your money-normal, as it can impact your life in huge ways?

Some people believe that you save regularly and stay out of debt. Others believe that the future is unknowable, so why worry about it. We ultimately define our actions based on our habits and what we believe is appropriate or in our best interest.

Meet Chandler who is a frugal spender, a good saver and even manages to invest here and there. He is happy with that lifestyle and always manages to have money available to do what he wants to do, when he wants to do it. He is organized, disciplined, a planner and a saver.

On the flip side Joey likes to spend as required, he likes to do and have what he wants and needs without consideration of next months finances, and as a result lives from day to day, not interested in, or maybe not knowledgeable of what he requires to save for the future. He thinks it will be there when it’s needed; somehow. (Of course there are many variations of those two examples.)

Both of these fictional people believe that their approach is normal. And it is because they live it. But the consequences can be very different. It’s not a matter of who is wrong or right – it’s simply, their normal.

You need to understand your normal, does it bring you closer to your happiness, satisfaction, comfort and a secure financial future?  If so, keep it going. If not, perhaps it’s time for a new normal…

A good start to being money-normal is to get a plan in place. Start by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

What is your “normal”?

Dream your Goals

If you don’t know where you are it’s often hard to know where you are going. Establish a budget; then revise and review. Your budget is a living document, it keeps changing so you need to keep assessing and adapting to these changes. Put some realistic goals in place and try to stick to them. You’ll benefit in the long run. www.YourWealthVault.com.au

Overspend once in a while, it’s good for you.

Imagine going to the shopping centre on Saturday and buying whatever you want: An iWatch, or even a new iPhone, that handbag you keep eyeing off as you walk past the store, a new jacket, or the latest sports shoes. Put it on your credit card, or split it over two credit cards, then it won’t seem as bad when you look at the statement.

We’ve all done it and it feels good. Coming home with bags of goodies, trying them on in secret, then when quizzed weeks later “When did you get that?” you retort “This old thing”. Haha, they’ll never know. Surely you’ve heard the old saying that “You live up to your income”, as your paycheque or income rises, so does your lifestyle. There’s nothing wrong with living well.

But, and there is always a But… that one-off spending spree is very rarely a “one-off”. It is addictive and gets the pleasure endorphins pumping. “Why not do it again, next week, it was fun and there’s still credit available on the card” And on top of all that the airlines are giving you reward points! Why wouldn’t you use your card?

Did you know that Australians owe approximately $32,673,480,146 in credit card debt as of this morning. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reoccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically, Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

While you’re at it, have a look at your monthly credit card statement. It shows how long it will take you to pay off your balance and how much interest you’ll pay if you only pay the minimum each month. (The short answers are “forever” and “heaps.”)

So overspending once in a while is good for you; hopefully it shows you how addictive it can be and gets you to review the financial consequences of that binge. Although a “once-off” may not impact you that much now, think about those endorphins that are working to create a monster, and there’s nothing more destructive than a spending monster. What about all that money you are spending on short term pleasure, and could be using toward the car, or house, renovation, holiday: the big ticket items that need saving for. Shame as those would be long term memories, not just a Saturday of short term pleasure.

What can you do to resist the “spending-money-I-just-don’t-have” urge?

Firstly use your debit card more than your credit card. Secondly put a simple budget in place, and then you’ll know what you have to spend, and what you don’t. We like to call a budget ‘Your Spending Plan’ as that is what we are all working around: Spending.

Here’s a helpful downloadable guide to control your spending and build your savings. 6-steps to Financial Security, a Free e-book from Your Money Sense. It’s a good starting point to get you in the right mindset to manage your money.

So next time to go for a bender at the shopping centre, take a few deep breaths before walking in and think about the long term financial goal.

Great money saving tip and could well be #1. What's your best tip?

Can you imagine spending $685 on groceries each and every week? Those of you with teenage boys certainly can. Yes, as scary as it sounds, that can be reality for big-boy big-families. Throw in a few packets of cereal, multiple litres of milk, a trolley of veges, half a trolley of meat and frozen dinners, topped up by lunchbox snacks and you’re well on the way.

Ok some of you may be thinking “That’s crazy money to spend each week”, others thinking “I wish it was only that.” Whatever you’re weekly grocery spend is, imagine if you could reduce it by 20%. In 5 weeks that’s a saving of 100% or 1 free shop every 6 weeks.

So what is the trick to this saving, and there is a trick? If we put this out to poll, and we will ask the question at the end, there would be many dollar saving ways to shop at your favourite supermarket. You could clip coupons from the local paper, although a lot of the shops have the actual catalogue on display before you walk in. How about creating a menu for the week so you are only buying essential ingredients? Or even create a standardised menu so you know what to eat and buy every week and not buying what you really don’t need. Too much time and effort? Yeah maybe, but good ideas to keep up your sleeve.

What is the trick then, the simple trick that can possibly save you up to 20% per week? Scale back the trolley size. That’s it! If you always grab the monstrous “just fit side by side down the aisle” size trolley, then grab the smaller “I may need to stack it a little higher” size trolley. Or if you can, just grab the hand held basket for the essentials. If you have a helper with you, it’s ok to carry one each or even two each. You may have to distribute the weights evenly throughout the baskets but it is possible to do. Those of you with the big-boy big-families could try one trolley and a basket, instead of two trolleys.

Don’t brush this valuable grocery money saving tip off lightly, think about it, as it is practical and will save you money. Shopping using the ‘smaller bucket load’ method will take a little planning once you’re in the shop but it encourages you to only get what you need, not all those “I have room for that and the shelf position and marketing is good so I’ll get it” items. Try it a couple of times and see how it works for you.

For more tips on saving money and budgeting please download our Free eBook: 6 Steps to Financial Security.

What is your grocery shopping money saving tip?

Is Money an Anxiety Trigger for you?

Anxiety is a serious issue with about 12% of the population suffering from this debilitating condition. That in itself is alarming. Anxiety sufferers struggle to learn how to cope with the many day-to-day triggers in their lives. It’s a great challenge for many of them. These triggers can come from anywhere, but one big trigger for independent adults is money. “Do I have enough, should I buy that, I’ve just spent too much, which bill shouldn’t I pay this month, have I actually saved any money this month?” Even for those that do not ‘technically’ suffer from anxiety, these questions can still raise their ugly head.

So how can you learn to cope with your money? To do so you need to organise your money and realise that putting a system in place will clearly show you what’s happening to your money. Is it coming in or is it going out? To simplify it, your money is pretty much a bunch of numbers, some positive and some negative. So to exist, you need to have a positive number at the end of the month.

OK, so how do you get to this positive number at the end of the month? Having a system of recording with regular checking will show you the flow of your money. It’s called a cash-flow. If you’ve got $100 coming in and $110 going out, then you are $10 cash-flow negative. To turn this around you need to stop spending at $100, or even better, at $90 so you’re now $10 cash-flow positive. How does one stop spending? By tracking where your money is going; watching your cash-flow. If you note and track your cash-flow each month you will soon see a trend of what’s happening and only then be in a position to work out how to change that.

Simplistically put: Record your money-in and money-out, review what’s happening to your cash-flow, and spend less than you make. That really is the mountain top view but it’s a good start to becoming more comfortable with, and less fearful of your money.

By managing the flow of your money you are in control and to an anxiety sufferer, control is a godsend.

A good start to this process is by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

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