![]() If your bank won’t play ball or puts up stiff resistance, which they most likely will, Pape says to let them know you’ve been offered a better deal at another bank. With your statements in one hand and your phone in the other, the Barefoot Investor recommends calling your bank and trying to negotiate a lower rate on your credit card repayments and loans – hard. Once you have your first domino lined up, it’s time for the next one: negotiating your larger debt repayments. This can include credit cards, outstanding fines or loan repayments such as for your car or electronics – basically, any amount of money you owe. Here’s a quick breakdown of each domino: Domino 1 (Calculate)īefore you initiate your plan of attack to crush your debt, you need to know what you’re working with – and that’s exactly what this first step involves.Ĭalculate all the current debts you have by writing them down or creating a spreadsheet on your laptop (as accountants, we love spreadsheets). To do this, Pape recommends organising your debt into five domino blocks that will then be knocked down as you complete each step. This will give you the feeling like you’re making great progress and will build momentum in reaching and paying off those bigger debts. List your debts in order from smallest to biggest, and then start by paying off the smallest debt. To help you pay off your debts easier, figure out if you can negotiate better rates with the current lender or move to another one who will offer you cuts. Make sure you write them down and include the interest rates next to each one. In this step, The Barefoot Investor says you need to tackle your debts. When it comes to setting up your bank accounts, the Barefoot Investor has recommended looking into banks such as 86400 (Australia’s first smartbank), ING, Ubank, Me Bank and Up Bank. The Smile Bucket is for fun longer-term savings goals such as a wedding, honeymoon or a holiday. The Splurge Bucket is for cash to spend on things that make you feel great like new clothes, electronics, appliances and your social life. It can also be used for paying off debts. The Fire Extinguisher Bucket is for big savings goals too, but more towards less fun things like saving for a house deposit or paying off your mortgage faster. The Blow Bucket is for your everyday expenses such as rent or home loan repayments, food, phone bill, internet bill, insurances and utilities. The book makes setting up the buckets easy for you, but basically, this is how you should be allocating your income each pay: The idea is simple and straightforward: set up buckets (accounts) that will plan where your incoming money will go. This next step is based on Pape’s ‘Serviette Strategy’, which he wanted to make so simple that he was able to write it out on the back of a serviette, hence where the name came from. Are you covered for everything you need? If you aren’t aware of what’s available or necessary to your situation, we can give you a hand here too. Pape also suggests looking at your insurances as well. #BAREFOOT INVESTOR DAILY EXPENSES HOW TO#If you’re unsure about how to approach this area, we can help with superannuation and guide you in the right direction. Compare fees and check what your fund invests in. Reviewing your super fund is also important. Having that money put away will take a lot of stress out of managing your financials. Work towards getting $2000 in there and save it for a rainy day. Consider opening a new account, which Pape calls the Mojo Bucket. You should be paying zero bank account fees, and if you are being charged, then switch to a new bank ASAP. Start looking at things such as the fees you’re paying on your everyday accounts and your super fund. If one or both of you isn’t there yet, monthly date nights are a great way to start the discussion. This means both parties in a relationship too. So much nicer than those crappy after work convos at home!Įveryone should be aware of their financial situation. You might want to try a new place each month, but remember to keep it fun and something you look forward to. Make it enjoyable by reviewing everything over a glass of wine and some delicious food. Date nights are the perfect way to track how your financial goals are going and if you’re sticking to the steps. Book them in with your partner, or yourself – now. ![]()
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