| Step 1 - Prioritise: Agree what is more important to you – in broad terms there are not many choices. You could spend big on lifestyle. You could save to be able to afford a house, children, retirement or some other goal. You could spend on your own personal development such as education. Once you’ve agreed on a list, give it a name (like ‘Our Money Plan’), and write it down.
Step 2 - Know where your money goes: If you can’t measure it, you can’t manage it. However boring it may seem, you need to look at your spending and decide if it is consistent with your priorities.
Step 3 - Don’t eat your money: Most cash spending goes on food, so if you ever wondered where that $50 from the ATM went – you probably ate it! If you could save $50 a month and invest it at 7%, you would have over $8,650 in 10 years – enough to pay a year’s school fees or make a dent in your home loan.
Step 4 - Shop wisely: When you are spending on larger items, think before you buy. Do you need the big brand name? Maybe yes on a new stereo, but maybe no to new clothing. Comparison-shopping does make a difference and there are many organisations to help you find the best deals.
Step 5 - Keep talking: Having a plan is no good unless you review it from time to time. This is a time to leave the boxing gloves off – because you will make mistakes and cheat on your agreements. Your priorities will change over time and your 'Money Plan' will change too. It is important to agree on short and long term goals, maintain good communication and retain a sense of humour.
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