KnowledgeTips for managing on a low income, Sept 2020

Managing on a low income Sept 2020

Making every dollar count

We explore how to get the most out of your money and feel more financially secure.  A good way to start managing your money is to look at what is coming in versus what’s going out.

  • Look at your income
    Work out how much money you have coming in. This could be money from your wages or income from investments.  If you’re unsure, look at your payslip or bank account each week or each fortnight.
  • Track your spending
    To see how much money is going out, track what you spend over two weeks to a month. Include every transaction, no matter how small.  This will give you a clear view of where your money is going. (not to mention help you to develop a budget)
  • Separate needs from wants
    Use the information you’ve gathered about your ‘money out’ to decide which things are your ‘needs’. These are the essential items you need to live, such as your accommodation or electricity.
    Everything that is not a need is a ‘want’. These are things you could live without or reduce the amount you spend on them.  If you do cut back on wants, look for other things to make you happy that don’t involve spending money.
  • Think about what you spend
    Knowing exactly how much you pay for things means you can look for better deals. See where you can save — on everything from groceries, to phone credit.
  • Set a goal
    Think about what you want to do with your money. By setting a goal, such as paying off a debt or saving for emergencies, you’re more likely to spend less.
  • Smooth your bills
    Knowing when expenses are due can help you plan and stay in control of your money.  Use your bills and bank statements to mark the due dates and amounts on a calendar. Add them up to work out how much you’ll need to put aside each payday to cover bills when they are due.
  • Start a savings habit
    Once you have your money under control, try to start saving. Having some money set aside can be useful when unexpected or urgent things come up.
  • Consolidate high interest debt
    Review any loans you have – can you consolidate them into one lower interest personal loan?  Take the time to review lenders and their interest rates (and their fees) when you do need a personal loan.  Don’t pay more than you have.
  • Generate additional income
    Is there a side hustle that you can do to increase your income?  Making cakes or crafts to sell in your spare time.  Getting an additional part-time job or renting out a spare room.  Is there anything around the house that you no longer need that you can sell?  Try to think outside the square.
    And don’t forget, the more you learn about better managing your money -the happier you will be.