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Money

10 steps to better finances

Put your money fears aside and get started on the path to financial wellbeing.

If only you could find a way to whip your finances into shape and still have fun ... the good news is you can. Following a few simple steps will help you discover the secrets to money success.
1. Start paying attention: Statistics show that close to half of Australians ignore their money situation, potentially spending more than they earn and racking up debt. Knowing where your money's at puts you in control.
2. Stop thinking you have to know it all: You don't need the skills of a financial expert to work out what's best for you. Taking baby steps can make a huge difference. Start by completing the CBA Financial Wellbeing Score questionnaire to identify your problem areas.
3. Write down your goals. Having goals helps you get into the right mindset. It's like deciding to ditch junk food to reach your health goals - stop overspending on things you don't need to reach your financial wellbeing goals. Try the CommBank app's Goal Tracker to help you break down your goals into more achievable weekly targets.
4. Get to know your spending habits. It's easy to overspend if you're not paying attention, particularly if you're tap-and-going all over town. An easy way to open your eyes to your spending is to withdraw an amount that you think will cover your day-to-day expenses, such as takeaway coffees, lunches, and trips to Priceline, for a week. Reach into your wallet for the cash each time you spend and watch it disappear.
5. Start a budget. Developing a simple budget allows you to pinpoint your financial goals while rethinking your spending habits. It also means you can allocate a percentage of your income to life's little pleasures, without feeling guilty. Try CommBanks budget calculator to help you budget like a pro.
6. Shave your outgoings. Shop around to get a better deal on utilities such as energy, gas, internet and mobile. Then take a closer look at your subscriptions - do you really need Stan, Netflix and Foxtel? Gym memberships are another potential source of money down the drain.
7. Break down your debt. The big picture can be overwhelming so reframe your commitments into bite-size milestones. For instance, break down that $5000 debt into weekly repayments. "Rather than waiting to see how much you have left at the end of the month to pay towards your debt, it can be more useful to set a budget that incorporates repayments towards your debt," says Kate Crous, Executive General Manager of Everyday Banking Commonwealth Bank.
8. Pay down your highest-interest debt first: "Mathematically speaking, the debt with the highest interest rate will be your most expensive debt. By focusing on paying down this debt first, you will reduce the total amount of interest you pay over the long run," says Crous.
9. Start saving. Experts recommend putting at least 20 per cent of your income into a savings account. You might need it for a rainy day or a big unexpected expense but it's also money for your future. If 20 per cent seems a big ask, start with 15 per cent and aim to increase by 5 per cent as soon as you can.
10. Make friends with your super: Consolidate your super accounts if you have more than one and save on administration and management costs. You can check your super by registering for the Australian Taxation Office's online services via myGov. This will allow you to see details of all your super accounts, including any you may have lost or forgotten about.
To help improve your financial wellbeing, please visit financiallyfitfemales.com.au. Proud partner, CommBank. Always consider your personal circumstances before acting on financial advice

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