5 easy ways to change your money mindset forever

Humans are creatures of habit, and unfortunately when it comes to money many of us have picked up a few bad traits over the years.

However, we all have the power to change, and if you make an effort to ingrain positive financial habits into your life chances are they will end up sticking.

Here are five easy ways to change your money mindset forever.

1. Save 10 per cent of your income… without fail


Every time you get paid, send at least 10 per cent of your income to a high interest savings account that you simply don’t touch. If you receive a salary, set up an automatic debit from your transaction account to a separate investment account to make sure this always happens. This may not be enough to achieve all your financial goals, but it’s a great start.

2. Become a year-round negotiator


From bank fees to televisions, gym memberships to insurance, you’d be amazed at how many things are negotiable. You’ll be even more amazed how much you can save when you commit to negotiating on every transaction you make.

To do this, you need to be informed about the product or service you’re buying, leave any emotions at the door and always be prepared to walk away. Yes, it takes up a bit of time and confidence, but the savings will be more than worth it.

3. 15 Minute Monthly “Money Love”


We understand that learning about money isn’t everyone’s cup of tea, but you’re doing yourself no favours by staying in the dark about finances. Take the time to think about your financial goals and how you will achieve them, then build a basic budget and make sure you’re living within your means.

If you have amassed big credit card and other bad debts, put a strategy in place to pay them off as quickly as possible. My Money Makeover can help you do this.

Every month set aside just 15 minutes to THINK about your money and give it some love. Not to pay bills or do financial admin, but to set goals, assess how you’re doing financially, or adjust behaviour. In other words, working on your finances rather than in them.

Kochie’s advice on how to ask for a pay rise

4. Take super and insurance seriously


When it comes to money, superannuation and insurance are often put in the too hard basket. They seem complicated and you don’t benefit in your regular day to day life today. However, superannuation and insurance are vital to your long-term financial well-being.

For many people, their superannuation account is their single biggest asset. It will determine your lifestyle for 20 or 30 years of retirement. How much thought have you given to how it’s invested and the fees you’re paying. The Money Makeover will show you how to get informed and take an interest in your superannuation to maximise your nest egg.

Meanwhile, insurance could be the only thing standing between you and financial ruin. Make sure you understand your policies and read the fine print. Are you adequately covered?

5. Set-aside an ‘opportunity’ fund


An emergency fund is money you set aside and don’t touch unless you really, really need to, and we think this is a great idea. But instead of thinking about this as money for an emergency, we prefer to think about it in terms of the opportunity it affords you.

We recently heard a story about an American named Matt Becker who lost his job, but used the financial flexibility that his “opportunity” fund gave him to take a chance and start his dream business… a financial advice firm for new parents.

It’s a good story, and goes to show that improving your money mindset isn’t just about having a bulging bank balance.

It’s also about giving yourself the opportunity and flexibility to make good decisions in your life.

Don’t waste your money on these pointless expenses

Buyer’s remorse… we’ve all been through it. We’ve lashed out and bought a product or service and then reality sets in and we wonder whether it was worth the money.

It is always a very personal decision on whether something is worth the money or not. We’re all different.

But there are some things that are simply never worth the money, no matter the spin you put on it.

Here are some of our top “money wasters”… feel free to add to the list.

1. Cheque accounts and bank branches

Do not enter a bank branch again and never write a cheque again. Instead go to websites like www.canstar.com.au , www.ratecity.com.au and www.finder.com.au to find and compare the online saving accounts your financial institution offers.

Then contact the bank and switch old fashioned transaction accounts over. Pay bills either by transferring online or through Bpay.

You’ll slash bank fees and earn interest. Don’t be scared, it’s not hard. We have an 84 year old parent who has taken to online banking like a professional.

2. Bottled Water

Come on… really? This is such an amazing First World waste of money.

We whinge about paying $1.50 a litre for petrol but happy to pay $2.50 for 350mls of water we can drink for free from the tap. At $2.50 a day, that’s $17.50 a week, $910 a year.

We have some of the best tap water in the world. Buy a re-useable drink bottle and turn on the tap.

3. Delivered Food Services

It is so fashionable to have lunch or dinner delivered to home or office. Just look at the peloton of bike riders racing around the streets with food delivery backpacks. At $5 a drop off, surely it’s easier and cheaper to go for a healthy walk and pick it up yourself.

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4. Credit Card Interest

Credit cards a scourge on the family budget. They tempt you to live beyond your means and then charge exorbitant interest rates if the monthly balance isn’t paid off on time.

But for many, a credit card was essential for phone or online purchases and transactions. Not anymore. A debit card offers the same convenience, using your own money and incurring no interest.

If you must have a credit card, go to the Canstar and Ratecity websites to make sure you have the right card which suits your financial habits with the lowest interest rate. Maybe look at transferring your perennially unpaid monthly balance to a new card which offers 0% interest on transfers for a period of time and then work diligently in paying it off during that period.

5. Extended warranties. 

The chances of you using an extended warranty are so small that it’s not worth it in the vast majority of cases. And, many of the ‘in-store’ warranties that are offered don’t even cover the most common causes of failure on the products they’re covering. Why are they offered? A retailer may make a 20-30 per cent profit margin on selling a product but makes almost a 100 per cent profit margin on selling you an extended warranty.

6. Long distance telephone calls

Most wireless broadband services allow free or low cost access to local and interstate calls plus cheap overseas rates. Using services like Skype and Whats App can slash costly phone bills. The power Smartphones means you can make these calls from anywhere.

We have children and grandchildren living in London and Hong Kong, but never pay to call them.

7. Brand Names

From prescription drugs to fashion and food staples there are cheaper generic alternatives of the same quality as the bigger more expensive brand names. Often the goods are produced at the same factory using the same ingredients.

Granted some brand name items are superior and they’re market leader for a reason. But there are just as many where it seems you pay a higher price just to subsidise their marketing campaigns.

Surely rice is rice, and paracetamol is paracetamol, no matter what the brand.

8. Forgotten direct debits

Go through the credit card and bank statements line by line and highlight those regular direct debits to make sure they’re what you think they are and you still need them.

We recently wondered what a monthly $49.95 charge on our credit card statement was. We’d always thought it was a magazine subscription and just kept paying it.

It turned out to be a portable wireless connection we’d bought years ago and no longer used.

Direct debits for magazine subscriptions, club fees, gym memberships and donations should be assessed to see if you actually want or use them.

9. An expensive coffin

Yes we’ve gone through a stage recently of unfortunately attending a few funerals and it amazes us how elaborate the caskets can be when they are about to be burned or buried for a long time.

It sounds a bit morbid, but wouldn’t you rather leave that money to family or donate it to charity where it will be put to much better use.

10. Being disorganised

Have a good look at yourself and the way you manage your money. The extra bank fees from dipping into overdraft or not paying the credit card on time because you forgot, rather than didn’t have the money, are just stupid.

Things like automatically paying an insurance premium rather than checking whether there are better deals, leaving lights on in unoccupied rooms and not using discount coupons are all silly money wasters and also easy to fix.

11. Buying steak at a restaurant

Okay this is a little quirky. Is it just us? But we are constantly disappointed paying $30-40 for a steak at a restaurant that appears to be no better than what we cook at home from the butcher for $5.