There is a lot of talk about rising interest rates, rising cost of living, and rising inflation.
The problem is, we’re also in a time of falling financial literacy which means we know we should be doing something, we’re just not sure what.
Too often this means people financially flee, freeze or stick their head in the sand and pretend it’s not happening. What if there was a better way?
The good news is, there are some smart things you can be doing now, both to protect your finances as well as to give them a nudge forward. Here’s five smart things you can start doing today.
1. Create an emergency fund
Prior to the pandemic, emergency funds or buffer accounts weren’t really talked about.
When COVID-19 hit, they were suddenly super sexy. That’s because having a pot of money in case of emergency means that when life happens, such as unexpected repairs or illness, you don’t have to rely on the credit card.
And no, jetting off to Europe for summer isn’t an emergency.
2. Live within your means
This one seems so obvious but living within your means is the secret sauce to having great finances.
Too many people are trying to keep up – not simply with their peers but with influencers on the internet who aren’t even buying the products they’re spruiking.
My advice? Unsubscribe, unfollow and unfriend, and start to think about what’s important to you, instead of being influenced to think or purchase in a particular way.
It also means swapping, pausing and cancelling expenses so that you’re plugging up that leaky bucket of unnecessary expenses.
3. Find additional income
Too often we head straight to tightening the belt on our expenses, which is important, but we don’t think about finding more income.
Whether that’s a second job, a side hustle, becoming a delivery driver, doing surveys online, renting out your stuff or even completing your tax return, finding more income can be a great way to supplement the rising cost of living and means you’re not solely reliant on your wage.
If you have a mortgage, one of the biggest ways to find more income is to ask your bank for a rate reduction. Inside my course, the My Financial Adulting Plan, the average rate reduction received is 0.50 per cent and the biggest saving was $15,000.