Do you feel that you’re spending money faster than it’s coming in?
Do you want to turn this around and have more money in your pocket?
If so that’s great, because there are 3 simple steps that have seen most of my clients save thousands of dollars a year.
- Sharpen the pencil on you’re rates
- Assess your debt position
- Know what your invested in
What we’ve noticed over the past few months is that our clients are spending more money without actually buying extra. It seems that we all have less money in our pockets and this is basically inflation – i.e. the cost of good and services going up.
But there is a way to claw this all back.
I’m getting ahead of myself here lets have a look back to figure out where we are now!
The beginning of the GFC saw the beginning of the end of wasteful consumption and expenditure.
What do I mean by this?
It’s simple – The world had experienced economic prosperity for 15+ years and what was true in the business world is also true for individuals and families.
Simply put, we all grew fat and wasteful in times of prosperity. It’s not an unusual phenomenon it’s basic human psychology.
How often do you question things when they are going really well?
Ever heard of the gravy train? Well the Economy was gorging itself on the gravy train[CH1] . When we needed more money, we just borrowed it and the banks lent it. Some times we didn’t even need an income or assets to get a loan. Times were that good and money was thrown around with little consideration when compared to less prosperous years. We started getting paid more and started paying more for everything.
One of Fenton’s Theories “good fortune is squandered by the fortunate
Now the gravy train has ended – debit and thus endless access to income has stopped and put simply its time to tighten the belts.
The good news is that this can be done in most cases by being smart, efficient and may not affect you life at all.
How I Hear you ask. It’s as simple and 1-2-3.
1. Sharpen the pencil on your rates
2. Assess your debt position
3. Know what you’re invested in
This month we are going to deal with
1 Sharpen the Pencil on your Rates
To do this look at what the major expenses in your life are:
- 1 Gas/Water/Power bills
- 2 Mortgage/Credit Cards/Car loans
- 3 Health Insurance
- 4 Groceries
- 5 Holidays
- 6 Clothes
- 7 Entertainment
- 8 School Fees?
One of our more recent clients took our Sharpening the Pencil and saved a small fortune and this is how it’s done:
Gas/Water/Power bills
There is no secret that these bills have gone up exponentially over the past 5 years and that was OK when our wages were going up with them. But now the only ones getting Fat are suppliers of these services.
Granted the Magic Mining tax, Carbon Tax and the salinity plant issues have not helped.
But there is something you can do – WHAT???
Sharpen the pencil check out these sites and see how much you can save:
This one boasts you can save up to 30%
Let’s do the math:
Average house hold electricity bill circa $500 per ¼
Total cost per year $2,000
30% saving = Savings of $600 per year
2 Mortgage/Credit Cards/Car loans
These are more often than not you largest individual and family expenses.
$500,000 Mortgage @ 6.10%
$ 30,000 Car @ 9.99%
$ 3,000 Credit Card @19.89%
If you’re like one of our clients Jan and Jeff – we call them JJ. This was costing them in total around $34,000 per year
After one meeting with us they walked out $5,658 better off.
How did we do it – Simple we sharpened the pencil and did all the hard work for you.
Right now JJ’s $6,258 better off for the year.
3 Finally Health Insurance
Health insurance has been hitting the press recently and it about to soar – or so they say. I think it’s pretty costly right now.
Many people are paying for extras they will never use and the Insurers are getting FAT on your pregnancy extra when you decided not to have any more children.
Check out this site:
Link Broken
JJ managed to reduce their cover by over $10 per month by customizing their packages and getting a reasonable rate.
That’s $120 dollars for 30 min research online and 30 min on the phone.
Worth it?
Part of what Financial Planning is about is bridging the gap between where you are now and where you want to be in the future.
Sure we provide general information to sharpen the pencil on you health insurance and power bills and you will save via doing that. But we also help you manage the complex affairs in your life like you Mortgage, Credit cards and Car loans etc.
JJ are saving $6,408 every year and we’ve not even started talking about investing yet. Imagine how much more we could save you.
If you’re keen to start creating more wealth in your life? Then give us a call and we can run you through it NOW.
Don’t spend another minute making others FAT on your hard work. Start smart and Sharpen the pencil.
All the best,
Andy Fenton
Financial Specialist
Owner of Mornington Financial Services
