Here at Police Bank, we want our Members to get the most out of their finances. However, we still sometimes see some questionable financial behaviour, which we’d like to discourage – check this list to make sure you’re completely on top of your money!
Problem: Not having a budget or financial plan
All too often, we find people fail to keep to, or even have, a budget. The Australian Securities and Investments Commission found that only two in five Aussies had a short-term financial plan, and even fewer had a long-term one.
This sort of long-term view is integral to reaching your financial goals, and it is worrying that so many are foregoing this incredibly important process.
Solution: Just make one!
There are plenty of different ways to make a budget. For example, one particularly popular method is the 50, 30, 20 budget. For this one, you spend 50 per cent of your budget on things you need, like the mortgage, utility bills, and so on; 30 per cent on things that you want and 20 per cent you put straight into your savings.
It sounds simple, but do you ‘want’ your unlimited internet plan, or do you actually ‘need’ it? If you use it for work, it could be a need. If you use it to watch cat videos on YouTube, we’d define that as a want (though you might argue that).
Problem: Not keeping track of your money
We have a bit of a problem when it comes to keeping track of our money. However, it’s not the actual act of tracking our money that’s the issue, it’s the method. The latest Australian Financial Attitudes and Behaviour Tracker revealed that an overwhelming majority (94 per cent) of Aussies are checking their money in some way – but 23 per cent are still choosing to do it in their head.
Not keeping track of your capital and, perhaps even more importantly, your expenditure, can lead to some seriously unpleasant surprises when you open up your statement.
Solution: Use an app
We understand making a budget can be a time-consuming and often inaccurate process. Receipts just get thrown away or take up too much space, and keeping track of it all in your head seems like a solution, even when it’s not. But there is a quick, easy way of tracking your money in the increasingly popular form of financial apps for your smart devices.
According to the Australian Communications and Media Authority, half of all Australians had used a tablet to access the internet in the six months running up to May 2014, so chances are you are already familiar with the format. At Police Bank, we have a budgeting tool for our Members, so now there’s no excuse for playing mental arithmetic with your finances.
Problem: Vulnerability to sudden losses
Bad things happen, it’s all a part of the life experience. How we plan for these issues, however, is what defines how well we recover. Whether your car suddenly breaks down or you have to have an expensive medical procedure, it pays to make sure you have an emergency fund in place.
Solution: Have an accessible savings account and contribute to it
You might already have a savings account, but is it quickly accessible? Some banks lock you out of your savings, while others punish you for withdrawing from it – you need to have the option of capital liquidity without being slammed with unnecessary costs. Check with us here at Police Bank for your options in accessible saving funds in case of emergency.
Whether you’re after a home loan or just financial advice, get into contact with the local NSW experts here at Police Bank!