SMALL CHANGES = BIG DIFFERENCE

“Become aware of how you spend your cash every single day,” advises CLEO’s resident cash expert, Jody Fenton. “People often think it’s the bigger purchases making their finances hard, but usually it isn’t. The small items that you buy every day or every week add up to more than most people realise.”

So, what to do? “I recommend keeping track of spending for a four-week period, like a ‘money diary’.  Every time you buy something, write down the date, what you bought, its cost, and how you paid for it (cash, EFTPOS or credit card).

At the end of the period, have a look at the list and identify where your money is really going. Ask yourself: Could I spend that money on something else?”

MAKE A TO-DO LIST AND ACTUALLY STICK TO IT

“The most common reason people overspend is that they don’t know what they really want,” says Fenton. “Sit down and write a list of all the things you really want to experience, from visiting Egypt, learning to surf, and visiting the art gallery to buying a gorgeous designer handbag. Then stick the list where you’ll see it at least once a week. Being aware of the things that are important to you will curb your desire to ‘go overboard’ on other spending.”

CURB THE URGE TO SPLURGE

“To splurge or not to splurge comes down to personal taste,” explains Fenton. “The easiest way to figure out what things you should spend a bit extra on is to test yourself.  When you’re grocery shopping, look at your favourite things and compare the prices of your usual brand to a generic brand. 

If you can’t bear to put the no-name packet in your trolley, then this is a splurge item for you.  With clothes shopping you may be looking at high-end designer versus middle-of-the-road brands, or average versus chainstores. A spending plan should be flexible, so if you decide to drop more coin on a takeaway lunch, you should cut back on something else. Flexibility is the key to making a budget work.”

MAKE MORE MOOLAH

One word - eBay. “There’s a reason why people have online shopping addictions - it’s a great way to de-clutter your pad while also getting some extra money at the same time. You could also pimp-out your skills. Are you a PA who’s always booking flights and accommodation?

Lots of busy people don’t have time to find holiday bargains, so why not start an email list of the best bargains you find during your day job and receive referrals for any booked work. Just be careful not to compromise your day job position.

Are you a great shopper who spends every lunch hour trawling the shops? Then advertise your services around the office building. For a small fee you may be happy to be a colleague’s personal shopper during your lunch break!”

THE VERDICT...

“With some limits, yes I do think this it’s possible to live a champagne lifestyle on a beer budget,” says Fenton (to our relief!) “It comes down to knowing exactly what you want to spend your money on, what experiences you want to have, and then knowing whether those things are a champagne or a beer budget item."

"You work hard and you need to enjoy your life (which sometimes costs money). Spending your money wisely doesn’t necessarily make you a cheapskate!”

Jody’s simple steps to financial success…

1. Discover what you spend your money on now. 

2. Work out how you want to use your hard-earned cash.

3. Write a list of goals you want to achieve.