A Financial Expert Told Us to Adopt This Simple Method for Saving
Here at MyDomaine Australia, the journey to becoming more financially responsible and frugal is permanently attached to our goal-setting agenda. So much so, that simple office-banter about our latest homeware obsessions can quickly traverse into how we're saving for house deposits, reviews about the latest financial apps we're using, and the newest advice we've read from experts on how to make our precious dollars last longer. So, last Friday, we decided to get financial expert, Joel Robbie, the co-founder and CEO of Nod., into our HQ to quiz his expertise on some of our most burning questions—one being, can we, in fact, buy that Chanel, boy?—and to reassess our habits at the early stage of the new financial year.
What we found? Some easy and surprisingly old-school ways to track our spending, without it dominating our lives.
Keep scrolling for the key-points that Robbie gave us, and watch the video below for his full explanation of why money and fun aren't opposites after all.
tip 1: pay off your debts first
"Credit cards have really high interest rates, anywhere from 13 to 23 per cent, so it's easily the most expensive debt you can have. So pay that off first if you can."
tip 2: HAVE A DIFFERENT ACCOUNT FOR EACH PURPOSE
"My wife and I have actually just moved to a new system of managing this stuff, so it's topical. We are both on monthly salaries and they way we do it is to have four or five different accounts with different purposes with our bank. So, there is one for daily spending, saving for a holiday, and one for saving for emergencies. We tend to use that method, so that when we get paid on the same day, we have automatic transfers set-up so when the money comes in all the money flies around to the different accounts and we know how much we actually have to spend each month."
TIP 3: PAY YOURSELF A "FREEDOM WAGE"
When speaking of how he and his wife spend, Robbie suggests starting a "freedom" account: "We have a certain amount which we can withdraw in cash every month. What we found is really nice, is being able to anonymously withdraw a certain amount every month, whether it's $400 or $500 and that's yours to spend however you like, and it's nice to have that freedom to spend on whatever."
TIP 4: TRACKING YOUR SPENDING CAN BE SIMPLE
"I'm pretty low-fi, I still think the best way for me to manage [money] is a boring Excel spreadsheet. [Budgeting apps] don't tend to categorise transactions that well. So yes, you can get a nice graph of how your spending is going but you don't really get a sense of on what. So I've found an Excel spreadsheet is the best way for us to track spending."
Robbie also suggests tracking your spending on a monthly basis. "Spending is not something you need to track on a daily basis, I think that's obsessive compulsive and crazy. But I think monthly is good, to check that nothing weird happened, that there are no weird expenses in there."
tip 5: organisation and being realistic are key to saving effectively
"I think everyone needs a spreadsheet or a way of tracking. So you need a baseline of where you are at... And then I think the second thing is to not focus too much on the spending side of things ... you've got a lifestyle and that's highly unlikely to change. So don't focus on spending so much, but the biggest thing is to earn more money. So the great thing about money is it's two sides of the coin, so it's how much you earn and how much you save. If it's about saving for a house deposit, your spending is your spending, work out how you can earn more money faster."