Category: Money Matters
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Sub category: Security
22 October 2021

The hacks & habits to master your bills & cashflow


Effectively managing your household bills, budget and cashflow can seem intimidating, but with a bit of practice and patience, you will feel more in control of your living expenses and quite possibly see some spare cash in your accounts at the end of the month!

An important factor to remember is that whilst our monthly salaries are generally the same each month when they are paid into our accounts, our living expenses can fluctuate month to month. Some months we have excessive expenses (such as religious celebrations paired with school holidays), whilst other months there are less costly bills. Whilst there are periods of ebbs and flows, you can still create consistency with your cashflow regardless of external factors. Also, do not get fooled by quieter months and splurge your savings, as that money could be needed for an upcoming expense you forgot about.

This is how I personally manage my household bills and how I have helped thousands of people get on top of their cashflow and been able to infuse the essential balance between fun and financial responsibility.

Have 4 bank accounts – all linked and with the one bank. That way you can see your entire cashflow in the one convenient screen and can move money instantly. Each account must be nicknamed with relevance to its purpose – this will provide more financial clarity.

Your first account is your “Everyday” account – this is where your after-tax pay is deposited and all your daily, weekly, fortnightly and monthly expenses come out. Be sure to check you aren’t being charged unnecessary fees on your transactions.

Your second account is your “Life + Emergency Money” account – this account acts as your financial security and is the most important account of all. It is where you deposit cash for those irregular expenses, plus your emergency money. This is where your quarterly, bi-annual and annual expenses cashflow sit, plus a concrete amount of emergency money (e.g. $10,000). Examples of expenses that need to be covered by this account include utilities, rego, car insurance, strata and even those special events such as birthdays, anniversaries and festive celebrations that are important to your family.

Your third account is where we add some fun – where we transfer some money from your cashflow and savings for a lifestyle goal, such as a holiday. It is the account that sparks excitement as you eagerly work towards that special reward. Nickname this account in relation to the goal e.g. “Holiday Savings”.

Your fourth account is your financial goal account – where we allocate some funds for an important financial goal. This can include a deposit, investments, kids’ school fees and even money for retirement. Again, nickname it in relation to the goal e.g. “Home Deposit”. Perhaps look into a high interest savings account for this, so your money is working harder for you.

The next step is to work out how to allocate your cashflow to each account directly. When you initially start, I recommend focusing on the first two accounts, only so that your emergency money is prioritised. Write out all your daily, weekly, fortnightly and monthly living expenses and total them up. This is the amount you need to put in your first account.

Then write out all your quarterly, bi-annual and annual expenses. Don’t forget to include birthdays, anniversaries and other celebrations that are important to you. A clever trick that creates consistency in my budget is by reducing my quarterly bills to a monthly basis – which get paid out of my first account. For example, I pay my council rates, strata and water bill monthly, in advance. This reduces my irregular bills and makes my finances more organised and easier to manage.

Each time you get paid, allocate a certain amount to get you through the month (or your normal pay cycle) and the rest goes to the second account. Keep this going until you have a sufficient financial float, plus your emergency money covered. It may take a while, but this provides an opportunity to review your existing expenses and see where you could cut costs – even if it is only temporary.

The moment you have your “Life + Emergency” account sufficiently stockpiled – you can now reduce the amount slightly, and redirect those funds towards the two other accounts, your Lifestyle Goal account and your Financial Goal account. This is the formula you follow each time you get paid. There may be times where you need to slightly alter this allocation, which is perfectly fine, as long as you are staying on top of your responsibilities and it works for you.

Illustrations from personal finance book, “Mindful Money” by Canna Campbell

As you achieve your goals, both lifestyle and financial, make sure you replace and upgrade them to suit your circumstances. Enjoy the feeling knowing that you are prioritising balance in your life by including money for fun whilst also being mindful of your financial wellbeing.

When we have a consistent banking ritual in place, we boost our capacity to achieve financial security. By streamlining our finances, we are better equipped for unexpected expenses, have sufficient money to pay off bills and may even see an increase in cashflow, which we can then put towards building financial freedom.

Have your money goals changed over this past year too? Find out more about the state of goals, dreams, hobbies, relationships and favourite lingo of Aussies in 2021 in the full ING Sense of Us report.

Canna is the founder of the financial media platform, SugarmammaTV, and author of financial advice books The $1000 Project and Mindful Money. She comes from a corporate finance background and is a licensed financial planner. SugarmammaTV provides educational content that helps make money and finance more approachable. She is also the founder and director of financial planning firm, SASS Financial Services.

This article was prepared in partnership with ING. The information provided in this article is of a general nature only and does not consider your personal objectives, financial situation or particular needs. The views expressed in this article are provided independently by Canna Campbell, a Financial Planner and an Authorised Representative of Wealthstream Financial Group Pty Ltd (AR 000309372) featured in the article. ING makes no warranty as to the accuracy, completeness or reliability of the information, nor does ING accept any liability or responsibility arising in any way from omissions or errors contained in the content. ING does not recommend any products, services or financial strategies mentioned in this article. ING strongly recommends that you obtain independent advice before you act on the content. Canna Campbell uses ING’s trademarks under arrangement with ING. ING is a business name of ING Bank (Australia) Limited, ABN 24 000 893 292, AFSL and Australian credit licence 229823.

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