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6.3 Set goals
By setting financial goals of where you want to be it can help you keep your spending in check. Start
with the big picture.Where would you like your finances to be in 25 or 35 years? Once you have
an idea as to how you want to retire, work your way back. How much do you need to save for the
next 10 years to make that happen? What about 5 years? What about next year? Are you spending
everything, or are you saving now? Knowing what it will take to achieve your financial goals can give
you a reason to control your spending.
Also you may need to plan for times when you are unable to work due to lengthy hospital admissions
or even to have a lung transplant. It is good to work out how you will cover these types of situations
financially. Thinking, planning and saving for long term events can take a great deal of pressure off of
you if the time actually comes where you are unwell and need to just focus on your health.
6.4 Try cash only
One trick to help you control your spending is to pay for everything in cash. Once you have a budget,
set aside the amount of cash you’ll need for each expense (at least the ones that you can pay
cash for). Make an envelope for each spending category: groceries, dining out, petrol etc. Once the
envelope for a category is empty, you cannot spend any more for that category until the next month,
unless you take money from another envelope. This budgeting exercise forces you to make choices so
you are spending your money on what’s most important to you. In addition, paying cash helps you
realise how much you are truly spending, so you tend to spend less.
6.5 Leave the credit cards at home
If you know your credit card is in your pocket, then you know you have it for backup. To keep from
spending, leave your credit cards at home so you aren’t even tempted to use them. You can’t add to
its debt load if it is not with you.
6.6 Manage your bills
If you find that in some months your cash flow is a little tight due to large annual payments you
can consider making smaller, more regular payments to help smooth your cash flow. For example, if
you pay your comprehensive car insurance in an annual lump sum, look into paying the insurance
premiums on a monthly basis instead.
BPAY is another payment option that puts you in control of your bills. You can pay them on dates that
are easier for you to manage based on when you are paid. If you know a bill is coming up you can set
up a payment in advance so you won’t have to worry about forgetting to pay on the due date. Make
sure you pay your bills on time as late payments often incur a fee or penalty interest.
6.7 Speak to your bank
If you are having financial challenges don’t avoid dealing with them, it will only come back bigger
and scarier. Act early if you suspect you are running into trouble and speak to someone at your local
bank branch or a trusted advisor. It might seem like a mountain to climb but once you have broken the
situation down into the basic elements you might find how easy your money can work for you.
• Commonwealth Bank: