Black Friday – How to spend guilt-free!
(Yes, we know this probably isn’t what you’d expect to hear from your financial adviser about Black Friday!)
But let’s be real. Its coming up for Christmas. We’ve had a tough year. There’s some bargains to be had. It would take a will of steel to avoid spending any money whatsoever on Black Friday.
So rather than lecture you about what not to do, we thought instead we’d give you the inside track on how you can organise your finances, so that when too-good-to-resist events like Black Friday come around, you can indulge a bit with peace of mind that you aren’t going to completely derail your future financial security for the sake of a hastily purchased new sofa or winter coat.
- Take care of your loved ones
If something happened to you today, what would happen to your loved ones? Your spouse, partner, kids or even parents? Would they inherit a shedload of debts? Would losing you as a source of financial support (not to mention a beloved family member!) change their life completely?
While your family might appreciate a snazzy new TV from the sales, its possible they might appreciate even more a chunk of cash to pay off the mortgage, or a stream of income to pay the bills and pay for school uniforms, trips and even uni fees.
We can often be quick to insure the things we buy (phones/electronics/bikes) but much less willing to insure ourselves. And its probably cheaper than you think.
- Get the most out of your employer
Employers offer a range of benefits that you may not be fully aware of. A key one for personal finances is a workplace pension. You might be automatically enrolled into this, or maybe not. Chances are, your employer will offer to contribute to this as a part of your contract. Sometimes, if you add more, they will match it. Investigate the maximum contribution your employer will offer to make, and what you need to put in, in order to qualify for it. Don’t miss out on free money!
Your employer could well also offer life or sickness insurance benefits (see point 1 above!).
If you are your own employer, there is plenty you can do to maximise your benefits tax efficiently as well.
- Give yourself a reality check
So you’re making the most of your employee benefits, that’s great. But, is it enough?
What do you want/need to do, over the next 10, 20 or even 30 years? Will you be buying a property? Paying off a big loan? Sending kids to private school or uni? Or hoping to retire from work completely?
Are your current pension, savings and investments, going to get you where you need to be? Or do you need to have a talk with yourself and start finding ways to be able to put more money away? The sooner you address the harsh reality of any shortfalls, the easier it will be to fix them.
If you aren’t sure if you’re on track, a SpringGen Road Map might help you figure it out.
- Establish a savings habit
Habits are notoriously hard to form, but once they are you don’t often change them.
Try to make “paying yourself first” a part of your regular pay cycle. Set up an automatic transfer from your current account into your savings or investment pots. Let this money move first, and allow yourself to spend what’s left. That way when Black Friday hits you know you’ve already committed your regular savings amount away in its proper place, and whatever is left you can be free to splash.
- Out of sight, out of mind
We can have the best will in the world when it comes to saving or even investing money, but the urge to fiddle, or dip into different accounts, can be very easy to fall prey to.
Quite a simple way to avoid this is to set up accounts with different companies – e.g. have your savings account with a different bank than your current account. If you can’t see the balance every time you log in to look at your transactions, there’s less temptation to just “borrow” a bit from yourself and promise to pay it back later.
Having a whole separate login might allow your lazy self to take over and not bother! So your savings remain untapped, and ready to step in in the even of a real emergency.
Likewise with investments, with an app it can be all too easy to log in multiple times a day to check what’s going on. We know the stock market moves every minute of the day, and in fact many investment platforms actively encourage investors to pay constant attention to what’s going on, which almost inevitably leads to unnecessarily fiddling and often, mistakes.
Delete your investment app shortcut, so you have to log in afresh every time you want to check in. This creates another laziness barrier and hopefully will mean a few unnecessary tweaks avoided. Aim to check on investments a maximum of once a quarter, or even less if you can bear it!
