Great! Welcome to week two. Were you surprised by your total annual income? Is it more or less than you expected? And did you find yourself asking “if my total wealth is $xx, then where the heck is all my incoming funds going?”
Well, this week is your week of clarity… and probably the most confronting to work out exactly where your money is going.
Grab that spreadsheet again. In column two, list all your outgoing expenses on an annual basis, including:
- Current interest on loans including personal, student and/or home loans, and on credit cards
- Repayments of those loans, ie personal, student and/or home loans
- All your expenses such as your bills for your utilities, car maintenance and rates
- Debt repayments including credit cards and afterpay facilities
- Fees from your bank, utilities and service providers
- Ongoing expenses such as medical or vet costs
- Subscriptions including streaming services, reading subscriptions, sport and gym memberships
- Groceries, petrol, coffee (use an average weekly spend and multiply for the 12 months)
- Average spend on entertainment
- Anything else?
Tally up the entire figures from column one (income) and the entire figures from column two (expenses).
Income minus expenses = annual disposable income. You could also break this down to monthly, fortnightly or weekly disposable income, to give you greater insight into the money going in and out of your pocket.
Tallying up all of your funds and deductions will give you a clearer picture of where your income is coming from and what your expenses are. Knowing your annual disposable income will help you to set up a budget.
All right. You can see the big picture. You know your income and your expenditure. What’s next? Are you happy how things are or do you have other dreams? Let’s set a goal in week three.
For week two, deposit an additional $ $10 in your savings account. By adding $10 a week to your savings, you will have an extra $520 over a 12-month period plus any interest earnt! Now you’ve turned that $260 a year into $520.
The LLL prides itself on providing savings accounts that are simple to operate, with a variable interest rate and no fees or charges. The LLL has a variety of savings accounts: personal and joint accounts; guardian accounts for children; and business accounts, including for self-managed super funds and not-for-profit organisations.
As an Authorised Deposit-taking Institution (ADI), the LLL is regulated under the Banking Act and by APRA.
This advice is general in nature and does not take into account your personal situation, needs or objectives. Please consider the Disclosure Documents to decide if this product is right for you.