Five top tips for building financial freedom
There is no better time than right now to start working on your financial freedom.
Even if you feel trapped and overwhelmed by your finances, especially in these turbulent times of high inflation, rising interest rates and international uncertainty, there is hope!
The Salvation Army Moneycare (free financial counselling service) has a range of resources as well as individual counselling available. So read on, to discover ways to build financial freedom and ease the financial squeeze.
Tip 1: Mindset first – why saving is important
Let’s face it – for many of us, saving money is really hard and doesn’t come naturally.
While living on a very tight budget can make saving difficult, the reality is that some people on very small incomes still save effectively.
Saving is incredibly important. It can give you a buffer for unexpected bills or other emergencies like a broken-down washing machine or a medical test; or help you achieve a specific goal like a holiday.
Sometimes the biggest barrier to successful change can be mindset. So how about adopting your savings mantra, as you implement a savings plan? Here are a few examples that might help:
- “No matter what, I save money every week.”
- “I save before I spend.”
Our free eBook, You're the Boss: Money Wisdom for Life, offers sections on money wellbeing, money management, creating new habits, setting up systems, decision making and more. It also has a range of activities and tips to encourage you to begin the process of saving money, or increase your level of saving.
Read the You're the Boss: Money Wisdom for Life here
Tip 2: Setting up sensational systems
Systems are methods of filing, paying bills on time, creating basic money plans (budgets), saving, planning for Christmas and holidays, meal planning and more. Systems are a key to successful money management.
There are many systems to help pay bills, budget and save, including automatic transfer and direct debit, Centrepay, payroll deductions, multiple (low or no fee) bank accounts, or even separate envelopes and cash.
A system can give you peace of mind and also reduce late payment fees.
What system can you start today?
Having fun with systems
If fun or impulsive activities are important to you, you can still enjoy the security and order of systems, while putting some ‘play’ time and money into your budget. Why not set aside some time in your weekly calendar and budget for your favourite hobby, or for an unexpected coffee with a friend?
Tip 3: Food costs – a recipe for success
There are plenty of enjoyable alternatives to eating out in expensive restaurants and cafes, or buying takeaway food. It just takes a little creative thinking.
If catching up with others around food is important to you, why not try meeting for a picnic instead of a cafe, or have your friends around for a potluck meal instead of going out for dinner? Why not replace your takeaway coffee treat with a thermos and enjoy a stroll in your favourite park? It will save money, save packaging, and getting out in nature is good for your soul!
And when it comes to family meals, if time and convenience are your concerns, rather than buy takeaway, why not focus on simple meal themes – like ‘Taco Tuesday’ as part of a weekly plan, or make a big batch of a favourite meal on the weekend, to cover some mid-week meals?
Beat supermarket temptations
There are over 30,000 products in many supermarkets – that’s a lot to tempt us! Supermarkets try to entice us to spend more with their store layout, advertising and packaging. Here are some hacks to reduce your supermarket spend:
- Stick to the plan: Plan your meals for at least the week and avoid extra trips to the supermarket.
Listen to your list: Shopping with a list is the most effective way to control food costs.
- Go alone: Shopping on your own (or online) may help you stay focused and stick to your list.
- Look high and low: Supermarkets put the products that make the largest profit margin at eye level. The bargains are found high and low.
- Fresh is best: Buying fruit and vegetables in season is cheaper. Why not consider joining a community garden, shopping at your local farmers’ market, or buying from local farms? Also, imperfect fruit and vegetables may not look as pretty, but are often cheaper, and taste just as good.
- Eat before you shop: It is better not to shop for food when you are hungry to help avoid impulse buying.
Tip 4: Working to delete debt
For financial freedom and peace of mind, it is important to start clearing debt and being very careful not to take on more.
The reality is that debt can affect relationships, health, feelings of self-worth and stress levels.
Debt repayment can feel overwhelming, but simply avoiding dealing with your debts such as credit cards, personal loans, buy now pay later, utilities, fines, school fees and unpaid taxes, only compounds problems and charges.
Clearing debts step-by-step
While your debt may seem like a problem that can’t be solved, there are things you can do.
It is so important to let the organisations you owe money to know your situation if you’re having difficulty repaying your debts. Ask if they have a hardship team and about the possibility of an affordable repayment program with no or reduced interest.
You do have rights
There are laws to protect you when you sign for a loan, or when you owe money. For more information, phone 1800 722 363 or visit this page to connect with a free Moneycare counsellor.
You can also contact the independent ombudsman if the company you speak to is not helpful – usually the Australian Financial Complaints Authority (AFCA).
Tip 5: Staying alert online!
Shopping online can potentially save time and money, while browsing store social media accounts is just harmless fun – right? Not necessarily!
Before you tap ‘add to cart’, it is important to remember that marketers, retailers and social media organisations work hard to target your shopping habits and interests. Even if you are not planning to buy anything, suddenly up pops an appealing ad on your phone, email or social media feed – matching your recent online searches.
They make their money by getting you to spend yours.
Plan before you purchase
While online shopping can be convenient and a good way to stick to a plan, online buying can also lead to a range of problems and dangers. This can include cyber-security issues and scams, as well as impulse buying, overspending, poor quality purchases, high interest on credit repayments and more. It really is important to think and plan before you click.
For many more tips on working towards financial freedom, The Salvation Army Moneycare Be the Boss – is a free series of 15 short videos and action plans to help you take back control of your finances. The series is designed to help you get on top of your money for good, by working out what’s important to you, what changes you need to make and how to turn good intentions into actions.