So Christmas, Boxing Day, New Years Eve and New Years day have all gone by – we have the photos, the memories and now the bills to prove it.
Many of you have sent thru New Years Resolutions based around refocusing on life and its essentials: health, family, fitness and finance sound like the Top 4. So then, there have been a few nudges for us to post advice on saving money and making money in 20/10, so we’ve put our thinking caps on and put together this:
Top 10 Ways to Save $$ & Make $$ in 20/10:
10: Be honest and look at your daily, weekly, monthly spending NOW
It seems easy enough to do but one of the most difficult things to admit to – how much did you REALLY spend over the XMas/New Years break? Most would say “…oh, only a few hundred” when actuality it was probably more like a few thousand! Not only were presents brought but you also paid for food, rent, petrol, a few dollars for ice cream, a this and a that…all of this can really add up, so it pays to write down how much you spent and on what (regular bills included). It might be private but at least you now have a good idea of where all your money has gone;
9: What is your current job and how much to you get paid before tax and in the hand?
Probably more important than #10 as it determines how much you can actually spend. In this instance, how much did you make last year, last month and in the next 4 months? Figuring out how much you paid out needs to be matched by how much you brought in. If they are even, then ka pai you. If you earned more than you spent, massively awesome! But if you spent more than you earned, please read on…
8. Put together a Budget and look where you can make Savings over the next 4 months
Now is probably a good time as any other to now put these two sets of working sums together and figure out your current financial health. We must remember that the more assets and capital under your control, the more choices and options you will have. In any case, a Budget sets out your financial position and begins to see where some savings can be made. For instance, are you doing an AP that can be brought down a little? Do you really need to buy a brand new car when 2nd hand will do? How many coffees do you drink in a week? The Budget is the first tangible action to saving any money and starting to set your financial future. It is always good to remember that the more you spend, the higher the risk. Spend $3 and lose, well, that’s dumb but life goes on. Spend $2000 and not be happy means major problems ahead. Add to this, where you do find savings, instead of splurging, pay your debts as this will save money on interest charges and free up long term cash later; putting coins in a savings jar is great too;
7: On 1-page, write out your Lifes Dream, your Financial Targets and prepare and develop a definite step-by-step Plan of Action
Some advice I overhead went “Every well built house started in the form of a definite purpose plus a definite plan in the nature of a set of blueprints” (Napoleon Hill) amd that so rings true for me. All it takes is writing down on 1-page where you want to be and then think about what it will take to get there. Clear, simple statements are good. You could well be looking to improve many areas in your life (i.e. whanau, work/life balance) so, by focusing on your Big Picture View of Life and then marking progressive steps toward achieving, it is possible to buildtoward fulfilling those dreams;
6: You have you now, so go and get others
What we have found is that no matter what the area, it is always invaluable to get some advice from someone acting as a mentor. The great thing is mentors are everywhere and pretty much freely available: if you want to be a chef, go to your local restaurants and try to talk to the kitchen crew. If it is a Hairdresser, go to your favourite salon and talk it over with them. They are bound to give you invaluable advice and the perfect guide may be there to help. Utilise whanau and friends to meet those involved in your focus area and get them to meet with you, txt you, give you rough nuggets of advice. Always respect what is taught and where possible, pay them back with compliments and even a meal if you are able. Your Action Plan should hint toward the direction you a re looking and a local Yellowpages (or CAB, online , or parents/elders) could put you in touch with people who can help. FInance is most definitely a team sport, so bring together a great time with excellent coaching and support staff. Always be discussing and where needed changing your Plan of Action;
4: Know the difference between necessity, habit and luxury and save the difference
You should now be able to see what is necessary (like your mortgage, rent, power, phone, food, petrol etc.), what are your habits (daily coffee, weekly dvd’s, takeaways etc.) and what are your luxuries (multiple cars, impulse purchases, new toys, etc.) If you are serious about whanting to save $$ and make $$, the first thing to do it look at the necessities – now, is it possible to reduce these costs? For instance, do you really need a landline if you mostly use your cellphone? Are you able to reduce your internet plan? Is it possible to find a better insurance rate and package the house, car and content for greater savings? If so, please do. Now, the next two come under the “do you really need this” category. Did you realise that if you take a home-made lunch to work everyday, ate out only once a week and drank one to two coffees a week, you would save hundreds a month and thousands a year? How much you save is just as important as how much you make. The key here is to treat a luxury item and a habit as part of your ‘leaky pocket syndrome’ and some urgent repairs will be needed there but will be so worth it. Once you have saved a few dollars, put it in an account you can’t readily access straight away – you will need this in the coming months;
3: Adopt an Entreprenurial Mind
Now we’ve spent the first 7 ideas talking about saving money, because these areally your fundamentals in creating a strong financial growth system. Ultimately its about the basics – knowing what you make, watching what you spend and re-prioritising on the move. This one is equally fundamental as it looks into opportunities around making money. You must adopt an entreprenurial mind. Do you have a skill you can teach to a small group (like english language, cooking, te reo) or do you have a shed filled with items you no longer need? Can you bring together a dynamic team and cover the market in a unique product that you have designed and developed or are you able to create a killer product for an upcoming market? Take a look and listen to problems faced by friends and whanau and research solutions – if you are first to market, sell it, focus on pleasing your new customer and improve the product/service. It could also be called monetising your hobbies. New Zealand has a habit of squashing the entreprenurial spirit (we’ll talk about this a lttle later) so get some advice and be ready for a challenge. Remember, people are spending smaller amounts today, so it will take a keen eye/ear to figure out what people will pay for and then evaluating how they can purchase from you. But selling a service or a product are all in the mind and while it is totally freaky, it can be rewarding;
2: Introduce yourself to improve your prospects
It is said that networking is the key to any successful venture, as it is as much about what you know as it is who you know. Look in your local paper for opportunities to meet with people in the same industry as you, to talk to people in the same field and to take courses and ask the experts about what you can be doing to improve your prospects. Initially, it will be word of mouth that gets you those valuable first referrals, so circulate and spread your net widely. It could be at the kids sports game on Saturday or while taking the kuri for a walk – talk with passion and with clarity to people who could be interested in what you are doing. In this instances, money is usually mentioned last, as the personal relationship requires that you build some sort of bond first. Taking courses to improve your skill base is vitally important as this new economic era requires that many of us re-tool but always be ready to quick pitch. If you have had a few jobs, use some of that money to buy Business Cards and start to utilise Social Media to get your name out there (this includes your local shop noticeboard);
And the Number 1 way to Save $$ & Make $$ in 20/10 is
1: Treat every dollar like it is an investment
Huh? Nah true whanau – by now you could have saved a few dollars and made a few dollars, so you already have a good idea that every dollar, every single cent is important. What we have written here look like things that can be done immediately but it will actually take time for many of them to pay off. There is lots of advice about what to develop, where to buiild, who to connect with and we recommend you take a look at all of it. For instance, it is important to stick to what you know and improve from there but equally important is to go where no one else is – it could be risky but it could also mean you are in position first. We have seen that everything changes – 10 years ago, few knew who Google were and today they dominate the internet. The same could happen to you, so it all depends on your personal attitude, commitment and ability to bring ideas to action and to turn action into results.
As stink as this sounds, keep focused on the bottom line as this will ultimately determine whether your dreams, targets and ideas rose to the top or sunk to the bottom. Over the next 12 months, we will re-visit this blog and continue to keep you updated.
Korero more soon.