After working in financial services for more than 24 years, and being exposed to some of the best professional investors from around the world, I have realised these five simple questions can save you thousands of dollars and help you save for a better future.
1. Is this the best deal I can get?
It sounds basic, but we often don’t ask the question. The first suspects are your health insurance, utilities, and super fund. It’s important to find out what fees you are paying, and ask the question. I realised that I was paying for maternity cover on my health care long after that horse had bolted! Nobody ever stopped to ask me did I still need it, and I never asked the question. When I did, I saved myself over $100 per month – that’s $1200 a year! Same with your utility company – ask if they can contract you to make it cheaper, or if you can get a discount if you pay by direct debit, or any other promotion or plan they have that can save you money.
2. How much can I invest in myself?
For years I have worked on the adage to pay myself first, which can be hard when you have a whole bunch of things to pay for. Usually we pay whatever we need to, and whatever we have left is what we live on. This is ineffective because we are putting ourselves last – and to get ahead, you need to put yourself first. They key is to ask yourself – what are you worth and how can you invest in yourself more? Then open an account that maximises your savings and that’s hard to touch and get it deducted the day your pay goes in! In a few months you won’t even notice it’s gone, and you’ll have a tidy nest egg building up.
3. Do I really need this now?
This is a great question to ask yourself when out and about shopping. Especially if you intend to put this item on your credit card. If you don’t have the cash to pay for it, and it’s not a burning, critical, must have item, really question whether you need it. Because putting things on credit is just increasing the burden on you to keep working just to pay it back. Start thinking of how to make what you have last longer, or go further, and cut back on what you are spending on day to day.
4. Can I get this cheaper buying online or in bulk?
Too often we pay up for items because we do need them now – a bit of planning and research can often save you thousands. Google is the first port of call, and with online selling sites, and cheap bulk discount places like Aldi or Costco, thinking ahead, and shopping around can save you a lot. Even buying in bulk and storing it can really work to get down your day to day shopping bills.
5. What do I really want for my life?
Sounds like a big question, but if you don’t have a goal, then all the questions in the world won’t motivate you. By spending some time thinking about what you really want your life to be like, not just next week or month, but next year, in five years and 10 years, you can start making some strategic decisions. Thinking long term can save you thousands of dollars making bad short-term decisions that don’t serve you and the life you really want. This will be more fun that you think!
Vanessa Stoykov, Financial Educator, VanessaStoykov.com
