3 things to do if you have no savings

Are you losing sleep over your finances? Feeling like you can’t make it to the next pay cycle? You may be experiencing stress when it comes to your financial situation. Perhaps you have some debt that is hovering over your head or you’re falling behind when it comes to your credit card payments.

You’re not alone as almost 40% of Australians are feeling stressed when it comes to their finances. This is according to the research found by online financial services company Spaceship who conducted the Fear of Finding Out Survey, asking over 1000 Australians how they felt about their current situation with money. The results revealed that people were losing sleep over their financial situation.

While you have a job that is secure and allows you to have a steady paycheck, having no savings can be dangerous if the unexpected occurs. Whether that be an emergency mechanical repair for your car or footing the bill for expensive dental work.

If you find that you’re strapped for cash all the time, the following tips may help you kickstart your savings so that you’re prepared for any sticky situation when it comes to money. 

What to do when you have no savings

1. Get educated.
2. Look at your budget and cut spending.
3. Change your mindset about money.

1. Get educated.

Kate Campbell, editor of How To Money Australia, writes, “I have definitely made mistakes and lost money along my own financial journey, but I have owned those mistakes and I have learnt from them. It’s not something that you can master overnight, rather I think of financial education as a lifelong journey of knowledge and lessons.”

When you read Campbell’s stance on educating yourself on your finances, one takeaway is to learn from your mistakes when it comes to your money management. You may have decided that saving isn’t a priority because you don’t have any specific goals in mind. 

However, it’s important to recognise that this is not ideal as you may need to be prepared for unexpected emergencies that can take a financial toll if you don’t have a backup plan. 

While having a credit card may be that “saving grace” when it comes to that mechanical repair, you have to consider the fact that money isn’t yours and you need to pay it back eventually. This is why it’s important to get educated when it comes to your finances. The following can help you get encouraged about kickstarting your savings:

• Talk to a friend who’s good with their money: speaking with a trusted friend about your finances doesn’t have to be awkward. Besides, we all work and pay bills so asking help from friends about how they budget can help you be accountable for your money management. They may be able to give you a pep talk on their own financial mistakes and how they learnt from them. 
• Listen to finance podcasts or read books: if you commute on a regular basis, listening to finance podcasts can be a productive way to boost your knowledge when it comes to money management. They can be entertaining and insightful and gives you an opportunity to feel inspired by people’s stories about getting out of debt and reaching their financial goals. Similar to this, reading books like Scott Pape’s The Barefoot Investor can help you take away important principles, encouraging you to adopt positive habits related to your finances. 
• Seek help from a financial counsellor: financial counselling is a free service offered by community service organisations, community legal centres and some government agencies where they assist people experiencing money problems. If you find yourself spending more than you earn or struggling with consumer debt, it’s recommended to seek financial counselling and get a professional to look over your current situation. 

2. Look at your budget and cut spending.

Have you looked at your recent transactions lately? If you’ve answered no, having a look now is a good place to start. You may be paying for monthly subscriptions to multiple streaming services and never use all of them, or perhaps you’ve spent a lot of money eating takeaway everyday instead of batch cooking meals on a Sunday to have food set for the week. 

Either way, you need to look at your budget and evaluate the transactions that prevent you from saving money. Be realistic about what you can afford and reduce expenses if you can. Negotiate the best deals when it comes to insurance policies or utility plans by comparing prices or cancelling subscriptions you no longer use.

Learn how to cook your own food so you don’t have to spend so much money eating out and use it to build an emergency fund that can provide you with the peace of mind knowing that you’re prepared for the unexpected.

3. Change your mindset about money.

Kristin Wong from Lifehacker Australia writes, “...money really is just a tool. It can be a powerful one, especially when you don't have enough of it. A simple shift in mindset isn't going to change your financial situation overnight, but it's a necessary step in getting your finances under control.”

There is a general perception that money is seen as the enemy and it shouldn’t be viewed like that at all. 

As mentioned in Wong’s statement, money should be seen as a tool because it allows us to pay for the things that matter: a roof over our heads, a bed to sleep on and food to eat to keep us nourished. When you learn and accept that having money is all about managing it properly, you’ll eventually learn how to appreciate the balance of paying for bills and setting aside money that helps you enjoy life too. 

You should not let your salary define your worth - it’s what you do with your hard earned paycheck that counts more. Changing your perception of money can make all the difference and can even help you adopt better spending habits that encourages you to be a better saver. 

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This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances. 
 

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