How to review budget and improve cashflow?

ASB has increased some of their short term interest rates yesterday and their 1 year rate is now at a whooping 7.25%. Today I spoke to one of my clients whose 2 years fixed rate (2.49%) loan would be expiring at ASB shortly, he was very concerned how to handle his new repayment amount which would be increased by $1,374 per month to $3,615 per month, that's $16k increase this year. There is no better time to review your monthly budget and see how you could improve your cashflow. To start the process you can log into your online banking and search the transactions in the past 90 days. And remember, always be honest to yourself.

First step - Look for things you are paying but not using

So often I hear people signed up for gym membership because they wanted to transform their bodies, or they liked the idea of waking up at 5am and exercising at 6am before work, but they never go to the gym once. Instead of paying $20 a week for a gym membership that you never get to use, how about being honest to yourself and cancel it? That's $1,040 saved easily. Instead you could go for a walk or run for free, or watch free fitness videos on YouTube and do bodyweight exercises at home. Having Netfix or Sky TV that you don't have the time to watch? Cancel them and there are plenty other videos or dramas to watch on YouTube for free.

Second step - Look for things you could trim or cut back

Too much UberEATS, or going out for lunches at work everyday? Maybe it's time to cut back some of them. You can bring lunch to work instead. Cook a larger portion and do a meal prep. This often saves you money as you're buying in bulk. How many coffee do you drink per day? I noticed many people buy a coffee before work, another one after lunch, and one more every time they go for a meeting or they think they just look cool. That's 3 coffee x $5.5, over $80 in one work week alone.

Final step - Look for things you must have but could do better

There are just some essential expenses that you could not cancel, but you could do better, for example shop around for electricity or gas providers, are you better off to be on Low User plan, or free 3 hours plan? Review your insurance plans with insurance advisers, could you adjust the excess amount, or change a few things to make it more affordable? Recently I reviewed my own insurance plans with my trusted adviser Jaime James and she identified areas that I could make adjustment and my wife and I could each save $15 per fortnight. Highly recommend to speak to Jaime for financial mapping and insurance review.

Speak up if you need help

Remember if you know you could be facing difficulties making repayments, or you wish to plan ahead, please do not hesitate to reach out to your advisers or banks as soon as possible. Banks are committed to help you and the sooner you let them know the better options could be available.

The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. SuperCity Mortgages & Insurance shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of SuperCity Mortgages & Insurance. We recommend seeking professional legal and/or mortgage advice before taking any action. Our Disclosure Statements are available on our?website.