Financial reset after lockdown: Simple steps to control spending as Australia reopens | australian lifestyle


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So Australia reopened and your bank account was emptied. It’s not surprising – between four months of social catch-up, the pre-holiday sales, and every beauty date in the sun, there is suddenly a lot more to spend money on.

But even as we embrace the pub with new enthusiasm, there are ways to lessen the financial damage. Here, financial advisers share some relatively simple tips for getting your money in order after foreclosure.

Review your budget

The first step in taking charge of your finances is always to create a budget, but make sure you are doing it the right way.

“A lot of people think budgeting is all about cutting and limiting your spending, when in reality you should fully understand what you’re actually spending each week,” says Victoria Devine, author, financial advisor and host of the She’s on podcast. . money.

To budget properly, look at your bank account to see how much you are actually spending on essential things like groceries – not what you want to spend. That way, says Devine, “you can align your budget and financial goals with your actual spending.”

The pandemic may have changed what you consider “essential” – for example, says Devine, “if you found yourself thriving without a gym membership during the lockdown, I think that’s something you could give up. of your budget ”.

Cancel these subscriptions

Speaking of gym memberships, when yours reopened they might have started charging you again, even though you are no longer present. Add to that signing up for every streaming service imaginable during the lockdown, and that means it’s time to take stock of your monthly subscriptions and remove the ones you don’t actually use.

Small recurring expenses like streaming subscriptions can add up quickly. Photograph: simpson33 / Getty Images / iStockphoto

“Monthly subscriptions can kill 1,000 denominations,” says Hamish Landreth, financial consultant at Prosperity Wealth Advisers. “A lot of people think, ‘. But those little recurring expenses can very quickly turn into a sizable annual outflow. “

Check your bank statements to get a clear idea of ​​what you are paying each month. “If you’re going into a subscription or ongoing payment, it’s important to make sure it’s something that you’re actually getting value in and not just paying for a force of habit,” says Landreth.

Curb online shopping

Likewise, if you became passionate about, ahem, supporting small businesses during the Delta days, Landreth suggests setting a course.

“Coming out of lockdown, it’s realistic to assume that some expenses, like gasoline costs or working lunches, will go up,” Landreth said. “Try to offset these additional costs by reducing meal deliveries or setting limits on online purchases. “

Automate your vacation fund

If you are (perhaps hopefully) planning an overseas vacation in 2022, now is the time to start saving. The best way to do this, says Devine, is to set up automatic transfers. First, open a savings account with a different institution than your checking account, so “it’s out of sight, out of mind”. Then set up the automatic transfer for the same day your paycheck is deposited.

This is the approach of saving by definition and forgetting. “[Automation] can actually be a great tool for people who don’t want to overdo it with their money, ”says Devine.

Check your income protection

Are you one of the Australians who changed careers during the pandemic? If so, you should check that your income protection still matches your current salary.

Restaurant bartender collects payment from customer using contactless payment
If your salary has changed during the pandemic, it is worth reviewing your income protection insurance. Photograph: Fly View Productions / Getty Images

“If there has been a job change, you need to make sure that what you’re covered for is what you earn,” says Landreth. “So if people have changed jobs or their wages are different, it is worth making sure that the amount of benefits remains appropriate. “

What if, uh, you don’t even have income protection?

“Not everyone has it,” said Landreth. “But I would say this should be a very high priority for people who have financial responsibilities, whether it’s mortgage or dependents, or anyone who would be in dire straits if their ability to earn an income was. deleted. “

He says this insurance essentially replaces your income if you are medically unable to work. “It’s kind of like unlimited sick leave, if you will. “

Look at your loans

If you have a mortgage, car loan, or credit card debt, this might be a good time to refinance it, says Landreth. It’s not particularly related to the pandemic – it’s just something worth doing every now and then to avoid paying what’s called the loyalty tax or, less generously, the ‘tax. lazy Girl “.

“It’s a bit of a trend, unfortunately, that banks often offer the best rates to new customers, often to the detriment of their existing customers,” he explains. “If you’re a regular customer who never makes a request, you are often overcharged on your interest rates. While the customers who call and ask for discounts or shop around are the ones who get the best rates.

Cut yourself a little slack

Ultimately, this is a time in history when it’s okay to be a little less than perfect with our finances. Devine recommends planning to spend more than usual over the next month, especially as we enter the holiday season as well.

“We have to give ourselves a little bit of permission to spend a little more. It’s actually OK going out for an extra glass of wine with a couple of friends right now, ”says Devine.

“I feel like it could be classified as a bit of personal care. It’s about taking care of your family, feeding yourself, and refilling your cup after what has arguably been quite a traumatic experience.

This is easy-to-follow financial advice.

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