We live in a world where buying things is just a part of our day-to-day. We want those flash new Nikes, we need the latest iPhone and we definitely have to keep up with our mates on a financial level. We might not know where we’re going to get the money to pay the electricity bill, but we don’t turn down the invite to that cool new restaurant.
But these habits can come back to bite us, so we need to get tough and look at the money we’re throwing away without even noticing.
Sophia Bera, Financial Planner at Gen Y Planning, says it’s not necessarily about cutting our spending completely. “Spending money is part of life. What we do need to do, is align our spending with our values.”
She suggests starting with a breakdown of our daily spending habits. “For a week, write down what you spend every day. Soon you’ll see what needs tweaking.” Says Sophia.
Bobbi Rebell, Author of How to be a Financial Grownup, says even if you don’t have a desire to budget religiously, keeping track of what you spend on an app will definitely improve your spending patterns.
So just where are we chucking our dollars away? Here are some of the most financially crippling areas it could pay to reassess our spending:
#1 High rent
We don’t exactly have control of the rental market but as Sophia says, we can do some rethinking when it comes to how and where we live.
“You may want that cool apartment in that hip suburb but can you afford it? Rent is the biggest expense we have, so keep this low by living with flatmates or family to keep living expenses low while you’re in your 20’s,” she suggests.
#2 Having “financial frenemies”
Bobbi says friends can be real money drainers. Not because of spending money on them but because they enable you to spend money on yourself.
“I’d say choose your shopping buddies wisely! Don’t shop with friends that constantly encourage you to buy things because ‘you deserve it’ or, ‘it looks too amazing NOT to buy.’“
#3 Brunches and Booze
A night of drinking quickly adds up, especially because money can become less of an issue after your millionth wine. Pair that with the lazy Sunday brunch that follows and boom, there goes your grocery budget for the week.
Many of us love to eat out but this is an area where money disappears very quickly, so Sophia suggests tracking your spending on food and drinks. “Perhaps stick to happy hours if you want to go out and even better, have dinner at friends’ places and BYO. You’ll see huge savings,” she says.
#4 Subscriptions / unused accounts / memberships
Streaming services. How many of them do we have? How many of them do we actually use? I’m a sucker for a free month with all these new services. The problem is I don’t deactivate after that initial period runs out. It doesn’t seem a lot when ten bucks is leaving your account sporadically. But put them all together and damn, it adds up.
Sophia recommends reviewing monthly subscriptions. “What do you need? Could you cut it out? Look at your gym membership; is it worth it for the times you actually go? Look at those unnecessary monthly charges on your bank statements. If there are charges you can cut, do it and redirect that same dollar amount to your savings.”
#5 Don’t let social media envy take over
FOMO can be a spending drain. Social media can really drive that desire for things we just can’t afford. Bobbi reminds us “never to assume those amazing experiences your friends are having on social media are as fantastic as they seem. Even if you miss out on an event because of low funds, accept it and realise you can’t do everything. Pick and plan for things that are the most important to you and maybe take a break from social media if envy is an issue.”
It’s not always huge monetary outgoings that are keeping us stuck. We need to re-evaluate small things, be on top of the bigger things and pinpoint priorities. Feel free to contact us at (08) 8231 4709 or info@centramoney.com.au to find out how we can help you reach your financial goals.
Article reproduced from TheCusp
by Katy Moore
