Be Smart With Your Money

Financial planner Lisa Dudson, of Acumen, suggests you start by creating a spending plan, which is “really a budget in disguise”.

Keep track of your spending with a spreadsheet, or use separate bank accounts for bills, savings, money you want to set aside for investments, treats and other things.

“Don’t get too hung up on the ’right’ way to do it, focus on what works,” says Lisa of finding a way to track your outgoings.

Save for the things you want and pay cash for them. “Debt generally costs a lot of money,” says Lisa. “Research shows that people spend 20% less when using cash, because they are more aware of where their money is going.

Credit card debt is often termed ‘bad debt’ because the money isn’t working for you in the way that debt you accrue to buy a property is, for example.

Your goal is to create a bigger gap between what you earn and what you spend. The bigger the gap, the more money you can save.

“You can increase the gap by earning more or by spending less, or both,” says Lisa.

Always try to be mindful about spending. “A great tip is to spend one minute longer thinking about your buying decisions – ask do I really want it, do I really need it, or can I get better value from my money elsewhere.”