If you're not saving 20% of your income there's room to improve
Getting financially fit is often on the NY resolution list along with getting physically fit - because it’s not just eating habits that get relaxed over the holiday period, you spend more freely too.
Hannah McQueen from EnableMe joins Carly Flynn on Saturday Fresh.
Hannah recommends four key things you need to do/keep in mind to help keep you from being a statistic:
- Work out where things stand now. We tend to be much more physically aware than financially aware. You need to put on your financial ‘skinny jeans’, jump on the scales, figure out your financial BMI. If saving less than 20% of your income, there’s room for improvement.
- A good plan has to take account of your psychology. You have to be happy or it will be like one of those horrible detoxes. So choose three things you feel you really need to enjoy life. It might be a daily coffee, a 6-weekly haircut. A good plan shouldn’t be about deprivation.
- Once you’ve worked out what makes you happy, you need to work out what you’re spending money on that doesn’t make you any happier. That second or third cup of coffee for example tends to bring less joy than the first cup. We fritter about 15% of what we earn, if you can isolate that spend you’re already on the road to a better year ahead.
- To keep you on track, you not only need to measure your progress, you need to know why you’re doing it in the first place. When discipline and the dopamine hit that comes from getting sorted start to wane, what’s your motivation? You need to find your ‘why’ and it needs to be compelling.
Listen to the full interview with Hannah McQueen above.
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