That $5 you paid for a coffee on the way to work this morning may not seem particularly expensive, but it's a cost that can really add up.
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Financial counsellor Nick Georgiou said over the course of the year, the cost of the daily treat was more than $1800. Even if it's a week-day only habit, the cost is still about $1300.
If that doesn't make your eyes water, the cost of a daily $10 takeway lunch is more than $3500 over the course of a year.
Mr Georgiou, who works for Wagga Family Support Services, says setting a budget is the best way to start taking control of your finances.
"Having a budget and a plan is the cornerstone. A budget will give you a holistic overview of exactly where your money is going," he said.
"A lot of us tend to have a very short-term view of our expenses, but we need to plan for those expenses that aren’t so short-term like things that come around quarterly and annually."
Another common mistake people make is living on credit, Mr Georgiou warns.
"It isn’t the advantage some people might think," he said.
"People think ‘if I put it on my credit card, it’s all in the one place’, but if you don’t meet those conditions, you’re adding 10 to 15 per cent to your cost of living, merely by doing it on credit.
"Another thing I’ve seen is people treating their home equity like spending money, like a piggy bank.
"That redraw facility on your home loan? Switch that off, pay that down. The bank wants you to redraw. The more money you’ve got outstanding, they more interest they make, which ultimately is more money out of your pocket."
Mr Georgiou also warned people to take a look at the fine print on credit products like Afterpay and "buy now, pay later" schemes.
"If you are disciplined, then yes you can take advantage of interest-free products, but you need to understand what are the consequences of not meeting those conditions. There’s always sting there," he said.
Mr Georgiou said it was important to plan for emergencies and have some money set aside for the unexpected.
However, if the washing machine blows up, he said there are alternatives to putting a large purchase on a credit card.
One option is NILS - the no interest loan scheme - available to people on lower incomes.
As household bills continue to rise, Mr Georgiou said he can see the impact.
"I think it is harder for people. If you’re on a fixed income and your cost of living gets turned up in some areas, like utilities and that sort of thing, then it’s got to come from somewhere," he said.
"But I think the reason some people do struggle is that they don’t have a holistic overview of what their income is and, more importantly, what are their expenses are - and you only get that by doing a budget.
"At least do a fortnightly budget, if not a full 12-month budget, that is going to capture everything from car registration to insurance to utilities to school fees to whatever it might be and in that budget you must include squirreling away some funds to include rain days and to meet unexpected expenses."
"A lot of people are employed now on a casual basis. There’s not a lot of security in that. If that business goes down, or the economy overall, and your hours get cut back, we need to plan ahead for some of those gaps in income and increases in expenses.
"A personal loan from a bank might take 20 minutes to sign up for online, but that thing could last for five years and the contracted payments are going to be exactly the same every month like a drum beat, for those five years."
So what are some of Mr Georgiou's top financial tips?
- Create a budget
- Bill smoothing - or paying a little every week - is a good way of avoiding a massive bill every three months.
- Take a look at your everyday spending. That daily $5 coffee adds up.
- Pay with cash rather than tap n go as you're more mindful of costs when you see the money leave your hand
- Check your bank statement in full every month. Know exactly where your money goes.
- Set limits during those consumer frenzy times like Christmas.
- Regularly review your plans for phones and internet.
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