As women, we’re all for testing new detoxes from time to time, but the one we often forget is arguably the most important: the financial detox.
Here are five ways to get started.
Track your spending for one month
Kickstart your financial detox by tracking your spending for one month. To do this, use your mobile banking app to record all your transactions over 30 days, no matter how tiny they are.
Spent $2 on a croissant? Note it down. Bought some toothpaste on your way past the chemist? Note that down, too.
A month is a pretty good indicator of your general spending habits. After the month is over, take a look at how you’ve been spending your money – the results may really surprise you. It’s easier to see where you’re wasting your money when it’s listed out in front of you in black and white.
Cut out the ‘junk’ spending
Just like a regular detox, it’s all about cutting out the junk. I’m not necessarily saying you have to stop buying chocolate (let’s be honest, we often need this), but it’s about cutting out a lot of the things that are ‘wants’, not ‘needs’.
For example, you may think you rarely spend money on eating out, but after tracking your spending for one month you could realise you do this several times a week.
Or you might have a habit of popping into Kmart to buy one thing, and leaving with $50 worth of items that you ‘needed’ each weekend. Identify those junk purchases that are ‘wants’ and cutting them out will help you save.
Go cold turkey on your spending addictions
Just like sugar, spending money is addictive. When you buy something new you get an instant high and feel great – until this fades and it’s time to buy something else.
Spending money can also be a form of de-stressing after a busy day at work, even if it is just buying a $20 candle (I’m guilty of this one).
As part of your detox try to introduce other ways to de-stress, like DIY yoga or meditating.
Fix any leaks in your savings account
As we say goodbye to the colder months, it’s a perfect time to do some spring cleaning.
Clearing out your dusty winter wardrobe and throwing out unnecessary clutter that you’ve accumulated can be extremely refreshing.
But why stop there? While you’re on a roll, consider giving your finances a spring clean as well.
Look for any automatic payments that are still hanging around, despite not being needed anymore, and get rid of them.
For example old magazine subscriptions you no longer read, that gym membership you swore you’d use, or even an old bank account you’re still paying account keeping fees on.
Dedicate time to finding better accounts
Just because you’ve been with one bank since you were in primary school, it doesn’t mean you need to stay there.
Banks rarely reward you for your loyalty, so don’t reward them with yours. It literally pays to spend some time comparing your options and switching providers. If you need some motivation just think, every day you stay with your low-rate savings account is money lost in compound interest.
The same goes for other accounts, from your monthly phone plan to your superannuation. While you’re in the spring-cleaning mood, it’s the perfect time to get this sorted. Stop telling yourself you’ll do it later and do it now.
Just like your physical and mental health, you need to devote time and energy into looking after your financial health. The sooner you do, the sooner you’ll reach your savings goals. Let the detox begin!