A financial advisor has shared her top “financial hacks” to help you meet your savings goals by the end of 2021, and it all starts with creating a budget and weeding out “toxic debt.”
Canna Campbell, from Sydney, explained what she does each month to boost her savings and investment portfolio and how much ’emergency money’ to set aside for a rainy day.
“Whatever you do with your savings, it’s important to always write it down so you can see how far you’ve come,” Canna said in a statement. Youtube video.
“It’s very easy to be tempted to throw in the towel and give up, but when you look at your notes and see how far you’ve come, you’ll be inspired by your own actions to keep going.” .’
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A financial advisor has shared her best ‘financial hacks’ to help you meet your savings goals in late 2021, and it all starts with creating a budget (Canna Campbell pictured)
The first and most important thing to do to bolster your personal savings is to get rid of every “toxic debt” you have in your life (Canna pictured)
1. Get rid of toxic debt
The first and foremost thing to do to bolster your personal savings is to get rid of any “toxic debt” you may have in your life.
“Before you reach other financial goals, such as saving for a deposit, starting investing, or saving for retirement, you need to get rid of your toxic debt,” Canna said.
Toxic debt includes everything from credit card debt to car and personal loans, afterpay services and delinquent payments.
“Give this priority. Budget, go through and adjust your living expenses, and use whatever money you come up with to pay off these debts as quickly as possible,” Canna said.
Paying off debt is never fun, the financial advisor added, but “watching the music” prevents you from getting back into debt and repeating history.
How do you calculate how much emergency money you need?
* Get your budget out and identify your cost of living for a month.
* This number times 12, because you need enough to live a year comfortably.
* This is your personal emergency savings benchmark.
2. Build your emergency funds
Once you’ve gotten rid of your debt, it’s time to boost your ’emergency funds’ – which will get you out of a tough situation, be it professional, personal or medical.
“With your emergency fund, I recommend that you establish your cost of living for a month and then calculate how much money you need to live comfortably for a year,” Canna said.
“This figure will be different for everyone, but this should be your benchmark for emergency savings.”
Once you know your figure, start saving for it and move it to a new account separate from your daily account.
“Call it ‘my emergency money’, this is very important,” Canna said.
“It’s so easy to get distracted when temptation comes your way, but if your money is in another name, you’ll feel guilty taking it away.”
“To make a budget, grab a piece of paper and a pen and write down all your living expenses, compared to your credit card and bank statements,” Canna said (pictured)
3. Make a budget
Then work on the savings of your financial goals and for that you need a budget.
“To make a budget, grab a piece of paper and a pen and write down all your living expenses, compared to your credit card and bank statements,” Canna said.
Stick to this budget and try to stay within the limits.
If you don’t have a budget, you don’t really have a clear idea where your money is going.
To calculate your emergency savings goal, identify the amount of living expenses you need for a month, then multiply it by 12 for a year (Canna pictured)
4. Work out your financial ‘game plan’
A game plan is important no matter what you do, especially when it comes to saving and investing.
“Think about how you’re going to achieve your goals and what you can do to reach them faster,” Canna said.
She recommends writing down your goals and game plan — because seeing everything on paper makes you feel much more motivated.
“Also, look at how you can achieve your goals,” the financial advisor said.
‘What can you sell? Is there a side business you can start or a promotion you might consider? Can you cut your living expenses or move?’
Write down how you plan to achieve your goals and regularly check your budget and plans to stay on track.
Once you have your emergency savings account and have started saving for your financial future, you need to start investing to really build your passive income (Canna pictured)
5. Start investing
Finally, once you have your emergency savings account and have started saving for your financial future, you need to start investing to really build your passive income.
“There is nothing more empowering than opening your own stock portfolio, as passive income is the key to financial freedom,” Canna said.
“The more passive income you have in your life, the more your money works for you.”
Canna has an investment portfolio worth nearly $200,000 – and this pays her a passive income of at least $7,500 a year. She also has other investments.
“I built that $1,000 investment portfolio at a time,” she said.
“You have to start somewhere.”
To learn more about Canna Campbell visit her YouTube page here.