“Better the balance, better the world.” That’s the motto for this year’s International Women's Day, which encourages all of us to call for a more gender-balanced world. The theme is especially fitting when we think about our finances. Would a better bank balance mean a better world for you?
The good news is that a ‘better’ bank balance doesn’t necessarily mean longer working hours, cutting out nights out or ditching family fun money. It’s more about being savvy with the money you do have as well as planning ahead.
Here are a few simple tactics that can help tip the balance in your favour...
Set up a rainy day fund
Like a Rom-Com plot twist, there are some things in life you just don’t see coming. But while an old flame returning to town may not put a dent in your budget, an unexpected car repair might. Having an emergency savings fund can help you stay on top of life’s unexpected moments and will save you from having to put large expenses on your credit card without having a solid plan to pay that balance off.
How much should you be putting away into your rainy day fund? This amount varies from person to person, but a good rule of thumb is to have at least 3 months worth of living expenses ready to go. This way, if something were to go wrong, like if you were to unexpectedly lose your job, you’d still be able to stay on top of bills and other living expenses.
Setting up an automatic deposit timed around your payday so that you don’t have to think about it is a clever way to start a rainy day fund. And to get the maximum amount of interest, be sure that you choose a savings account that pays bonus interest if you don’t make a withdrawal in the month.
Learn the art of negotiation
Whether it’s asking your lender for a better home loan deal or trying to knock the price down on a new fridge, being a skillful negotiator is a great life skill to have.
The trick to getting negotiating right is approaching the situation armed with all the facts. Say you were hoping to score a discount on a new TV, just make sure you’ve done your comparison shopping online beforehand so that you can get them to price match. | Kirsty Lamont, mozo.com.au
The same goes for financial products like your car insurance. For instance, auto-renewing your insurance is one of the biggest traps for overpaying. It’s a good idea to get at least 3 quotes from other insurers and then haggle for a better deal on your policy. It takes practice to haggle with confidence, so practise with a friend or record yourself on your phone. Having a haggling script can also make the task a lot easier and can also keep you from getting tongue-tied!
Always shop around
Just as you would shop around each season for clothes and shoes, shop around for a better deal on your utilities.
With the colder weather around the corner, one place to start might be your energy bill. Most households tend to use more energy during the colder months, which can land you with a whopping energy bill. If you haven’t checked your energy rates lately, it might be time you switched to a better value energy plan.
Ask for that payrise
According to research from SEEK, 61% of women felt uncomfortable asking for a pay rise, compared to just 40% of men. But with budgets getting tighter and living expenses rising, at a minimum you should be asking for a pay rise that reflects the current Consumer Price Index (CPI). To calculate how much more you should be earning to keep up with the cost of living, add CPI as a percentage onto your after-tax salary. This is the minimum amount you should be asking for in order to keep up with everyday expenses.
And if you’re looking to bump your salary up even further, it doesn’t hurt to jot down a few of your achievements that have helped the company over the last year to sweeten the deal!
Kirsty Lamont is a Director at financial comparison website mozo.com.au. She is passionate about helping women make better, more informed money choices to help them lead a financially savvy life.