The Leaky Money Bucket Syndrome

When you hear the word ‘finance’ what area do you think of ?  This term can cover everything from mortgages, to investing, advice and of course, basic money management.

General education doesn’t usually cover the in’s and out’s of managing money day to day and it is not uncommon for someone to be successful in their day job with a good income, but no ability to manage their money.

I’m going to call this ‘leaky money bucket syndrome’. There’s plenty coming in, but nearly just as much flowing out !

That’s where an expert like Melissa Meagher from Talking Money comes into play. We caught up recently to discuss how she helps customers plug some of those holes.

Melissa, tell me about your ‘typical’ client ?

My typical client is someone who does not feel in control of their financial situation, regardless of their income.

They are reactive (instead of proactive) to debt repayments and bills, and feel like they are just “existing”.  Many of my clients have financial goals and aspirations but can’t get to them because they are consumed by their current situation.

My clients can be any age, single or in a couple, children or not.  What unites them is a desire to understand where they are now, put in place a framework around their finances, which will ultimately enable them to move forward and feel empowered about their financial situation.

What are some of your ‘top tips’ for good money management ?

I actually have a number of them, but here is just a few;

1. Understand where you are re your current financial situation – what you spend your money on. This can be achieved through keeping track of your spending, prepare a budget and be disciplined.
2. Fully understand the ramifications of using debt – credit cards, personal loans and interest free periods – how much is this item actually going to cost you in the long run?
3. Don’t impulse buy using your credit card – it is very easy to do if the credit is available – perhaps walk away and have a think about it. Look at using cash instead – it makes spending more real.
4. You need to have an emergency funds for unexpected expenses (some suggest the equivalent of 6 months of income) – park it in a high interest account or a mortgage offset account if you have one.

(And of course, if you don’t have a mortgage that offer an offset account, I can help with that !)

If you’d like more information on Melissa’s tips or would like to work with her, feel free to connect on LinkedIn or check out www.talkingmoney.net.au.