Ben Harvey: Stop buying so much crap in cost-of-living crisis

[Pelican Press 0]

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Ben Harvey: Stop buying so much ***** in cost-of-living crisis

Another day, another headline about the cost-of-living crisis.

The humble chook’s in the frame at the moment.

“Chicken giant Inghams says more customers dining at home amid cost-of-living crunch,” was one headline this week.

“KFC chain owner Collins Foods warns on profit,” was another.

Australia needs to have a grown-up conversation about our finances.

The first step is calling out the cost-of-living crisis for what it really is — a cost-of-living-within-our-means crisis.

Most of us have got enough money to get by; we’ve just forgotten how to stop spending it on ***** we don’t need. Like takeaway hot ’n’ spicy tenderloins.

I’m not suggesting we all start living like we’re Amish, rearing chickens in barns we built ourselves, I’m just saying we buy a lot of garbage that we could do without.

Question: Ever get to the end of the week wondering why there’s no money left in the transaction account?

Answer: ***** you don’t need.

It’s boring advice but if you spend $1.01 for every $1 you earn then there is no financial planning kung *** that will save you. Spend 99¢ for every $1 you’re paid and life will work out pretty well.

The magic of compound interest makes that 2¢ spending difference quite a financial force over the course of a lifetime.

How do you stop spending money on ***** you don’t need? By identifying the ***** you do need.

To do that you need to work out how much it costs to run your household, and your life, each year.

Not just the home loan and essential utilities like water, gas and electricity, I mean every cost.

Write them all down along with the average annual cost of each and you will be amazed at the length of the list.

If you don’t spend more than what’s in the account the balance of your pay goes into then you will live a happy life filled with fried chicken.

School fees, health insurance, **** insurance, car insurance, life insurance, house and contents insurance car registration, driver’s licence, council rates, phone, internet.

Own a boat? Put the rego and skipper’s ticket on the list. If you go fishing from that boat then add your recreational angling licence.

Remember we are talking about noting every single bill you know you will be hit with in any given year so be honest.

Once you’ve compiled the full list you will likely need a stiff drink.

The annual bill will likely be far ******* than you realise. Here’s a handy financial hack to get on top of the relentless outgoings.

The journey to financial clarity starts with a move every financial planner will tell you to avoid: applying for a new credit card.

If you are an average household you need to get one that has about a $2000 limit. This is your float.

Once it and the pin number arrive in the mail, jot down the number on the front, the expiry date and the verification number on the back.

Put this information somewhere safe and then ******** the card.

The reason? So you are unable to carry it around and buy ***** you don’t need. To that end make sure it isn’t live on your banking app.

This is for payment of household bills and that’s it. Nothing else. Not clothes. Not holidays to Bali. It will be the most boring thing you ever own.

The second-last thing to do is divide the annual household bill total by the frequency of your pay. If, like me, you get paid weekly, then divide by 52. If your wage comes monthly, then divide by 12.

The figure you have calculated is the amount you need to excise from each pay packet in order to meet your household commitments over a full year.

Last step is to contact the issuer of each bill and set up an automatic deduction from the card you recently destroyed.

If you perform all these steps then you will never have to worry about having enough cash to cover the power bill again.

If you don’t spend more than what’s in the account the balance of your pay goes into then you will live a happy life filled with fried chicken.

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