For some, the very word ‘sale’ is music to their ears as they decide how they can use their extra cash they have been saving to bag a bargain. For others, the word can cause them to break out into a sweat.
This is not from the thought of shopping – but because they know their own actions are likely to do untold financial damage to their credit card.
So how do you get financially prepared for the mid-year sales to be able to enjoy the experience and not come crashing back down to earth when those credit card statements land in your mailbox the following month?
According to Bruce Brammall, Consumer Finance Champion for comparethemarket.com.au, the solution is a simple one.
“Like anyone about to tackle a new challenge – whether it’s running a marathon or embarking on a new adventure, it’s all about goal setting and being prepared. And in this case, developing financial fitness is the key,” he says.
Brammall says it’s therefore important before you even start to contemplate which jacket will look better on you, to adopt a top-down approach to being financially responsible about the whole process, which will allow you to feel a whole lot better when you get back home and show everyone what you found during your shopping expedition.
Here are his expert tips:
You can do this by reassessing some of your key expenses and see whether there are cheaper options available. When it comes to insurances (particularly car, health, travel and life insurance), use a comparison website to test your current provider. If it turns out you’re paying too much, it’s easy to switch and potentially save hundreds of dollars a year. This exercise can be the catalyst to put you back in control of your spending, before you even go near a shop.
As you approach the end of financial year it’s a perfect time to draw up a budget, particularly if you’ve never done one before. And then – importantly – stick to it.
A good rule of thumb therefore is to ask yourself how often you can use the item over a year and calculate an average cost per wear/use. If your return on investment is not likely to be realised in the foreseeable future, the decision is easy.
But tax deductions can apply to a lot of things. Spending $100 before 30 June could mean that you get up to $46.50 back in July. You do however need to know clearly beforehand what is allowable.
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