Hopefully by now you’ve started using Wally after understanding why we built it and have some insights about your spending behaviour. The next thing is to set up some goals to improve your finances. Here are a few tips to help out.
Be Realistic
Be realistic to avoid being disappointed. With interest rates fluctuating and down at the lowest, investing in the property market right now might not be the best choice. Perhaps it would be a good idea to start the process for next year? If you are looking at entering the market, stop and analyse your financial status, savings and expenses. Try a more manageable goal, open a savings account, and set an achievable target and start saving for that deposit. If and when you reach the goal, amp it up!
Similarly, if you want to pay off your credit cards, but you have been making the minimum payment on your cards for the past year, focus on paying off one card first. You will find that this will benefit you in the long run.
Be Informed
If you want to cut back on spending, you need to first understand how your money is spent; similarly to diagnosing an illness before prescribing a suitable medicine.
Using Wally will help you understand where exactly you spend money, as well as on what, with whom, and why. You might discover that you 10% of your spending money goes on travelling, or that you spend 30% is spent on leisure and eating out. Having a clear picture of what’s going on with your finances can help you decide where to cut back. The more diligent you get with logging your expenses, the better you’ll be able to understand them. So don’t forget to login to Wally each time you pull out that wallet to make a payment.
And if you’re looking to make big changes, make them where they count. Cutting back on that occasional flat white won’t make as big of an impact as those weekly online shopping splurges.
Think Incrementally
Set several small, specific goals. Are you looking at savings $10,000 by the end of this year? Is this a realistic goal? Break it down into manageable segments. With Wally, you can set a monthly savings target. You can track your progress and adjust your goal along the way, if you find you are able to save more or can’t cut back as much as you thought. Either way, achieving monthly milestones will keep you motivated to see it through to the end.
Tell people about it
Spreading the word about your goal makes you more likely to achieve it, because of the social accountability it creates. Behavioural economists call this a commitment device. With Wally, you can tag friends, roommates, and spouses in expenses and soon you’ll be able to create shared goals and budgets. This mimics the social accountability we get in our day-to-day lives, and can help you see through your resolution to spend less and save more.
Saeid Hejazi is the CEO and founder of Wally – a personal finance app available on iOS and on Android as Wally+. Download now.
