Be the woman who decided to take charge

May 01 2017 by Allana Elliott

Warm up +  detox

This is where you obtain your financial fitness base line.

  1. Collect your financial information – Payslips, Bills, Statements
  2. Complete a budget. There are heaps of online tools that can help you do this. Don’t forget to include those quarterly or annual expenses that you  probably forget about, like; car registration and CTP, Christmas or birthday presents, etc… This will ensure you don’t fall behind your budget and become discouraged
  3. Work out whether you have a surplus income, whether you spend what you earn, or the less ideal, you spend more than you earn

 

Cleanse + commence  fat burn

There will be some financial quick wins or ‘fat burn’ activities you can do to get the ball rolling.

  • Is there any ‘fat’ in your budget?
    • Are you shopping around for the best deal on health/car insurance?
    • Are you paying for benefits in your health cover than you shouldn’t be?
    • Are there benefits you can claim on in your health cover that you’re not aware of?
    • Can you get a better rate on your personal or home loan?
  • Do you buy your work lunches? This is likely to cost you $4,800 per annum. That’s a holiday if you think about it.
  • Are you paying interest on your credit card? You don’t need to, swap that over to an interest free card ASAP and get rid of that debt!
  • A lot of people set up a salary sacrifice contribution arrangement years ago and may not realise it’s still going. Consider pausing this if it helps you get on top of things in the short term, you can then start it off again later.
  • If you ever went to university, you may have deferred your fees and ended up with a tidy sum called a HECS debt or today HELP debt. It’s up to you to know if this is now paid up and to let your payroll know they can stop making payments for you. A good indicator of this would be if you receive bigger tax refunds than others on a similar income, or if your refunds spiked last year.
  • Generally expenses you incur to assist with you generating an income are tax deductible to you. Are you keeping your parking receipts, networking event tickets, education cost receipts and annual professional membership fees? These will come in handy at tax time and assist in maximising your refund.
  • Ensure to update your budget with any cost savings as a result of these fat burn activities and watch your surplus increase.

 

Cardio phase

This is the phase you need to consider where you’d like to be in 1 year, 3 years and 5 years’ time. You can build a plan and start to arrange your financial future to meet your objectives:

  • What’s the priority this year? Reduce debt?
  • What’s the priority in 3 years? Afford an overseas trip?
  • What’s the priority in 5 years? Purchase your first property?
  • With your cash flow surplus calculated in Warm Up + Detox , you know how much money you can direct to a separate account or to an investment fund. Get this set up as a regular account transfer, you won’t even miss it!
  • Organise your cash flow and automatically direct your money to each account using a zero based budget.

 

Maintenance phase

As with any successful diet, you’re looking to implement sustainable ongoing changes, not fad or binge tactics.

  • Is your budget working? If it isn’t realistic you’ll find it impossible to stick to it and you’ll end up worse off.
  • Keep organised – you should always know exactly when and where your money is going.
  • Do you know the deductions you can claim? You are an income generating asset and therefore generally anything you spend money on to achieve this is a tax deduction. Education course, networking membership fees, Linkedin Premium subscription etc – maximise that refund!
  • Lodge your tax returns on time, the funds should be included in your annual plan.
  • Stay away from store credit, if you don’t have the funds beforehand, don’t buy the goods. The interest rates on these cards, however tempting the initial offer is, are generally high!
  • Do you wish you could give more back? Donations are a tax deduction and with your financial health improving, maybe it’s time to harness your philanthropic side!
  • Set short term goals and reward yourself! Back in Cardio phase, you can include a “reward account”. Here you can direct some funds each month that you can use to splurge when you need that retail therapy… who doesn’t love a new pair of heels!
  • And the best part of a financial diet, that reward can be wine or chocolate – as long as it’s on special 😉

You should also  consider the benefits of using a financial coach, it’s easy to  get all  of this started, but being accountable to only yourself means it’s easier to get lazy  and lose sight of your goals, which leads you to binge… A good financial coach or financial planner who specialises in financial coaching will push you to be the best version of your financial self, they will keep you accountable and on track and they will also push you to reward yourself for the great  work you  do!

Feel free to get in touch.

 

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