I have been reading and learning about all things financial since I was a teenager. I then spent several years completing a double degree, post graduate studies in financial planning, and other varied financial qualifications. Along the way, I’ve easily read over 100 books and thousands of articles and pieces of research. This is my best advice…

The most important thing you can do to give yourself the best chance of living a wealthy lifestyle is to pay attention to your spending. Yes, this is incredibly simple but it’s true.

For most people, it’s spending - not income - which gets in the way of achieving financial goals.

Here’s what I would love for you to be doing:

1.      Pay attention to your spending. You don’t need to budget (they’re painful), just be conscious of how much money goes in, how much money goes out, and why it’s going out. What’s its purpose and is it a value spend? Think about what’s important to you; think about your mortgage, your kids, travelling… no doubt, you get where I’m going with this.

2.      Find wasted money. We all waste money, so this means we have scope to achieve savings. Start with the big easy wins where you can make sensible cuts to spending. Then move on to hacking at those costs where you can get a better deal (the internet has made it easier than ever to work out if you’re getting a good deal or not). Finally, I challenge you to scrutinise spending that you can modify (e.g. just coffee, not breakfast and coffee), or do this spending less frequently. If you want more ways to save just ask me, I love a good cost hack.

Our biggest costs are housing (20%, no surprise), food (17%) and transport (15%). These might be good areas to pay attention to first!

Firstly, borrow less to buy a house than what the banks tell you that you can afford. Secondly, cook at home more often and finally, wherever possible, buy a second-hand car.

These are the EASIEST ways to save thousands of dollars every year, which you can then put towards something that actually matters.

3.      Send the savings you find to a good home and automate this process. An automatic transfer of money into a separate savings account on pay day requires no more thought once it’s set up. This will ensure you stay disciplined. If that cafe breakfast money is no longer in your spending account, it’s safe to say you are not going to spend it (i.e. unless you’re using credit cards… cut them up if need be!). This isn’t to say you have spending issues, it’s to say that automating as much of your financial affairs as possible means less decision fatigue. We have so much going on in our lives, we need to make this stuff as simple and as easy as possible.

4.      Repeat this process. It probably sounds incredibly boring and maybe it is. But what I don’t find boring is turning small amounts of money into massive savings on the mortgage, money for family holidays, funding the kids’ education, wealth for a comfortable retirement or whatever is important or exciting for you and your family.

Most millionaires are not high-flyers who spend money on shiny objects like we are led to believe. They are sensible and smart with their money. They are somewhat frugal and align their spending with what’s most important to them.

What’s important to you?

Cheers,

Daniel

If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.

Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.

Daniel McGregor and Wealth Train are authorised representatives of Independent Financial Advisers Australia AFSL 464629