Feeling the Financial Squeeze

This week I purchased 5 bananas for $15.07.  I have to say, I was almost tempted to say no thanks.

The cost of food on the rise, 2 year high for petrol with no relief in sight, it is no wonder households are feeling the pinch and yet just this week the Sydney Morning Herald ran a story on how Aussies are wealthier than ever

To lots of us though, we don't feel wealthier.  Listening to clients and friends, we are more stressed now with making our dollar go further and are frightened with the prospect of increasing household costs and interest rate rises on the horizon.

For many of my younger clients, owning their home is nothing short of a dream.  Think back 10 years ago when saving $10,000-$20,000 meant a deposit on a home.  These days, it is at least $100,000-$200,000.

So how do you survive and save in this sort of climate?
Denial and spiraling out of control debt is a recipe for disaster.  Sometimes luxury items and holidays are a necessary casualty.
1. Understand your net position - what is coming in and what is going out
2. The next thing is to look at your cashflow.  What expenses are paid when and how does this impact on your cash position.  For example, quarterly bills can be really tough to pay.  So why not change the payments to weekly or fortnightly.  This can easily be done say for Council Rates, where you work out the weekly cost then setup a direct debit.
For other quarterly expenses, set up a weekly savings plan.  ING Direct is a terrific no fees Internet based bank account that can be used for saving.
What about those credit card debts?  Again, setting up a weekly or fortnightly payment system can help manage this debt a lot better.  And if you have a balance that you can't repay, then stop using the card!
Looking out for bargains on line is another way to save money and perhaps still enjoy a little luxury with the AUD so strong.
If you can't manage your money or don't know where to start, then seek advice.  Most clients who have sought advice and implemented a budget and better cashflow have actually ending up saving money along the way.