The 5 questions you need to ask in order to save money

A finance expert reveals what you should be asking if you want to stem your spending, stay in the black and begin to put some money aside.

We’re all guilty of buying items we don’t really need. A 2016 poll by government site MoneySmart found that most people impulse buy extras at the supermarket (38%) as well as impulse buying clothes (29%).

From small purchases to big bills, when it comes to our financial goals there are simple questions we should be asking ourselves. TODAY chatted to the Founder of No More Practice Education, a leading online financial education hub, Money expert Vanessa Stoykov.

A former finance journalist, Stoykov started her own business at 26 — helping companies in the finance industry tell their story in a more educational and entertaining way. Stoykov said her experience dealing with top investors, as well as her own financial mishaps, led her to want to help others manage their own finances better.

“Thats why I now focus on helping people unlearn ingrained money habits, and make small changes in their every day life which can add up to great changes and a much better life in the long term,” Stoykov said.

The finance expert shared her top 5 questions we should be asking ourselves to save money.

TODAY: So, what is the first magic question we should be asking?

STOYKOV: Is this the best deal I can get? Sounds basic, but we often don’t ask the question. The first suspects are your health insurance, utilities, and super fund. Find out what fees you are paying, and ask the questions. For example, I realised that I was paying for maternity cover on my health care long after that horse had bolted! Nobody ever stopped to ask me did I still need it, and I never asked the question. When I did, I saved myself over $100 per month — thats $1200 a year saved. Same with your utility company. Ask if they can contract you, and will it be cheaper? Or if you pay direct debit, can you get a discount — or any other promotion or plan they have that can save on your utility bills?

TODAY: And the second question can help us treat ourselves?

STOYKOV: How much can I invest in myself? For years I have worked on the adage to pay myself first. Which can be hard when you have a whole bunch of things to pay for. Usually we pay whatever we need to, and whatever we have left is what we live on. This is ineffective because we are putting ourselves LAST — and to get ahead, you need to put yourself first. Some have a rule of 10% of their earnings they put away BEFORE anything else gets paid. They key is to ask yourself – what are you worth and how can you invest in yourself more? Then open an account like an ING savings maximiser thats hard to touch and get (that percentage of your earnings) deducted the day your pay goes in! In a few months you wont even notice its gone, and you have a tidy nest egg building up.

TODAY: The third question relates to organising our finances doesn’t it?

STOYKOV: Do I really need this now? Do I know how much i can afford to spend that’s unplanned spending? Usually we believe we do, but its a great questions to ask yourself when out and about shopping. Especially if you intend to put this item on your credit card. If you don’t have the cash to pay for it, and its not a burning, critical, must have item, really question whether you need it. Because putting things on credit is just increasing the burden on you to keep working just to pay it back. Start thinking of how to make what you have last longer, or go further, and cut back on what you are spending on day to day.

TODAY: And question four suggests alternative shopping methods?

STOYKOV: Too often we pay up for items because we do need them now — a bit of planning and research can often save your thousands. Google is the first port of call, and with online selling sites, and cheap bulk discount places like Aldi or Costco, thinking ahead, and shopping around can save you a lot. Even buying in bulk and storing it can really work to get down your day-to-day shopping bills.  Also, check those coupons. Saving on petrol and basic items with these things takes no effort at all.

TODAY: And what’s the final question that will save us money?

STOYKOV: What do i really want from my life? Sound like a big question, but if you don’t have a goal, then all the questions in the world won’t motivate you. By spending some time thinking about what you really want your life to be like, not just next week or month, but next year, 5 years and 10 years, you can start making some strategic decisions about life. If you want to be a traveller, can you lower your overheads and save more, so you can go away regularly? If you want to save for a house, how can you figure out ways to live cheaply now, or can you move to where its more affordable? Thinking long term can save you thousands of dollars making bad short term decisions that don’t serve you and the life you really want. This will be more fun that you think! I have a quick quiz people can take on my website that shows them just what they need to unlearn about money to help them get ahead and ask the right questions.

Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.