The rising cost of living and interest rates are having an impact on everyone, but getting sound financial advice will help. We are seeing new clients in our business who are going through the first cycle of rising interest rates. Cashflow seems to be tighter, some businesses are feeling the crunch of lower consumer spending and there is uncertainty about rising rates. Many are not sure how best to tackle these next few years. Here are a few tips based on what we are seeing.
Budgeting
This is not for everyone and most of our clients are good at managing their money however we can all learn to understand where our money goes. An easy way to track this is to measure credit card statements (or savings accounts), over the last 12-24 months. You can do a quick download of transactions and add them up – a simple way to work out what you are spending on and if you are going backwards.
Food shopping
Always a big part of our weekly spend but maybe a bit more effort around the weekly shop is called for? Whether it is a weekly spend to get all the staples rather than the daily visit to the local store, planning out your weeks’ food needs can save you money.
Eating out
Eating out is where our clients have said they will always cut back first, and probably this is being felt now by the retailers. We know our staff fridge at work is full of meals from the night before to save buying lunches!
Finance review
Banks are competitive so getting your lending reviewed to make sure it is fit for purpose is important. Our own Shane Will from Boutique Finance is reviewing every Boutique client annually and have added significant value in negotiating better rates with the existing bankers. We work closely with Shane in formulating your Financial Advice in regard to your existing lending.
Managing credit cards and expensive debt
With Credit Cards pushing the 18-20% range now this is where people go wrong so keep an eye on that monthly balance.
Discretionary spending
This is different for every client as people value different things. We are a big advocate that you need to enjoy life but it needs to either be within the budget or accompanied with trade-offs e.g. a holiday over a car when money is tight. One great way is to use all those frequent flyer points accrued. If flights are paid for then the holiday cost can halve.
Working with a Financial Adviser
And finally having an Advice Map and an understanding the big picture of where you are headed is critical. Knowing the implications of what your financial life looks like now and into the future allows you to make informed and confident decisions about your Wealth.
Contact the team at Boutique Advisers today to review your situation.