Yahoo Lifestyle Drop a debt size!
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A whopping 96 per cent of Aussie women aged 25-44 say they’re experiencing financial stress, according to a recent survey conducted by ANZ and Pacific Magazines.
If your budget is as unpredictable as Courtney Love’s Twitter feed, we’ve got reassuring news: reining in your spending doesn’t have to mean a life without lattes (yawn).
To begin, take our quiz, which was created by money expert Jean Chatzky – it’ll help you understand your shopping habits, so you can spend smarter. Then check out our tips to help avoid impulse buys (do you really need that Groupon case of wine?) and save for the things you truly want (like a holiday, a car, a house, or – OK – a Chanel bag).
Ok let's go: Download the the spending style quiz
If you got…
Mostly I: You're inner driven
A true original, you prefer to spend money on items that reveal your personality. To avoid arguments with your partner about blowing your salary on a piece of art, for example, make sure you have your own cash. Set up a direct debit to put 10 per cent of your salary in a savings account each month.
Mostly S: You're socially driven
Sharing the wealth brings you happiness. You spend money with the needs of others in mind. But don’t neglect your own needs. Treat yourself once in a while. It doesn’t have to be something big – studies show it’s more satisfying to have frequent doses of smaller things than one big purchase.
Mostly P: You're physically driven
You get off on spending to enhance your wellbeing. But watch out for getting caught up in comparisons with people who have more expensive stuff. Instead, remind yourself that the price tag has little to do with the pleasure you get from a purchase. Find out exactly where your money’s going with a purchase-tracking app or website.
A good one to try is ANZ’s online budget planner ANZ's online budget planner , which adds up all your expenses and deducts them from your net income, so you can see at a glance how much money you have left over (or not).
Mostly F: You're financially driven
For you, money represents security. You spend smart, but basing every decision on money can suck the joy out of life. Loosen up a little and, if you do feel guilty about a non-essential purchase, find savings elsewhere. At electronics stores, the best deals are right inside the main door and in supermarkets the bargains are usually stashed on shelves above head and below waist height.
Rewire your brain to outsmart the sales (and grow richer)
Prevent those “But I only popped out for mascara” overspends by dodging retailers’ tricky techniques:
Tricky technique:
= Cost-slashing comparisons Research shows we’ll spend more if we can see how much we’re saving. That’s why stores will show you percentages: 30 per cent off sounds better than $30 off a $100 top.
Outsmart it If it’s an item of clothing, ask yourself where and when you’ll wear it… if there’s no obvious answer, don’t try it on. Once you’ve slipped into those snakeskin print jeans, your brain will subconsciously
take possession of them.
Tricky technique
Limited time only offers Bargain-driven websites like Groupon and time-sensitive sales can incite panic in consumers and inspire impulse buying, says psychologist Dr Kit Yarrow.
Outsmart it If you’re saving for a house or a holiday, make those abstract goals tangible so they’re more able to compete with a cashmere jumper on sale right here, right now. Use a photo of a house or Mount Kilimanjaro as wallpaper on your phone so you see it all the time.
Tricky technique
Pushing back payment Think of the furniture ads, “Pay no interest until 2015!” This strategy convinces your brain that the expenditure won’t hurt, because you don’t have to pay today.
Outsmart it Resolve to pay for things in full and use cash all the time. Research shows that the more “unreal” (ie, plastic) the form of currency, the more likely you are to spend. Leave the credit cards at home and swap the five $20 notes in your wallet for two $50s. Psychologically, they’re tougher to break.
Related: How to ask for a payrise
Four things you should never pay full price for again
It’s all a matter of timing – here are the best times to buy and why…
1. Cars
When to buy: End of any month Dealers get incentives for selling a certain number of vehicles each month. That means you should be able to negotiate a better deal when the sales team are running out of time to meet quotas. Cunning!
2. Tech goods
When to buy: December/January TV and computer prices always drop in time for the Christmas rush. Web gossip mills such as
Macrumors are handy to find out when new models will hit the stores.
3. Jewellery
When to buy: Any time but Christmas Most jewellers generate one third of their annual revenues and almost 100 per cent of their profits in the two months leading up to Christmas. When business slows, prices drop. Then you shop.
4. Bicycles
When to buy: January Hit the stores after the holiday rush but before they get new models, usually in February and March. If you buy in your local full-service bike shop, barter for extras like a year of free tune-ups.
Four steps to a fully functional budget
1. Figure out your monthly income. This should be your take-home pay, after taxes and contribution to a super fund.
2. Write down all your “fixed” expenses. These are monthly bills like your rent, electricity bill and car payment. If you set aside money for savings every month, include that figure here, too.
3. Track your “variable” expenses: groceries, clothes, drinks with friends… the stuff you could cut back on if you needed to.
4. Compare the numbers – and adjust as needed. If you’re coming up short, you may have to start taking your lunch to work. And if you have leftover cash (good on ya!), consider investing or starting a “rainy day” fund.
