If you’re serious about sticking to your budget and achieving your 2020 financial goals finding a reliable and trustworthy friend to act as your Money Buddy and join you on your financial journey could be the thing that makes 2020 the year you reach your goals and improve your financial health. But how do you choose the right friend and how does a Money Buddy make a difference?
1. A Money Buddy will help you stay accountable
Ever heard the saying “those who write down their financial goals are 42% more likely to achieve them’’? As well as writing down your financial goals, sharing your goals with people who you trust can help to keep you accountable and increase the chance of you reaching those goals.
You might decide with your Money Buddy that you want to save $5,000 in the next 6 months, so you need to save $200 a week in order to do that. Each week you call each other and check in on how you’re tracking. You may even find you have some savvy saver tips to share. Having someone hold you accountable also means you need to fess up on the weeks you accidentally impulse buy and spend your “savings money” on the latest trending product that you couldn’t possibly wait to have. The thought of having to fess up might be enough to stop you from pressing “BUY NOW” all together! And yes, it still counts even if you ‘Buy Now Pay Later’ over 4 easy fortnightly payments.
If you want to make a start by saving $1,000 in 10 weeks, join our Money Bounce Back Challenge and refer a friend to get your savings goal started! Join here.
2. Friends can make a massive impact on your social spending
“We are the average of the five people you spend the most time with” a famous theory by motivational speaker Jim Rohn. This refers to not only behavioural choices like how many times you go out together a week or go shopping but all areas of your life including your mindset, salary, career goals, values, aspirations, and personal success. For example, your friends are all saving roughly $100 a week but you know you’re capable of saving $300, you never end up saving more than $150 at best because you don’t feel the pressure or expectation to be saving more. Where comparatively if your friends were all saving $300 a week it’s more than likely that you would be reaching closer to saving the full $300.
If your friends aren’t on the same page as you when it comes to financial goals and they are still set on going out two nights a week and owning the latest gadget instead saving it towards something bigger, it may be time to start networking and find some friends who have similar goals. Look for people who inspire you and who aren’t going to derail you from your own journey to success.
3. A Money Buddy can prevent you from giving up early
Saving isn’t easy and it can sometimes feel like you have to live out your days like a hermit in fear venturing out of the house, as any error of judgement could lead to you blowing your savings account! The beauty of a Money Buddy is that they are going through this with you! Just like when your gym buddy is dragging you along the cycle class you were adamant on skipping out on a Money Buddy may convince you to choose a movie night instead of going to the cinemas.
Having someone on the same savings journey with you who is consciously aware of what you are trying to achieve means you won’t feel alone in your efforts and like you need to give up your entire social life.
Although having anyone hold you accountable is better than having no one there are some considerations to make when choosing a Money Buddy.
Finances can feel very personal so it’s important you choose someone you feel comfortable sharing your savings and financial goals with. You don’t need to share salary or a detailed budget but opening up about money can be harder than you originally thought.
One great way to start money conversations is to identify your goals. To get your head around this you may want to start by listing your achievements for the last 12 months. This can help you set the scene for the year ahead. You may also want to have an expert on your side, participate in deliberate savings, and know what your next investment is. You can download our resource on personal goal setting to create your picture.
Another great way to start to talk about money is by identifying your Money Mindset. It can provide valuable insights into how you approach your relationship with money as a start-point to having meaningful conversations. We discuss this further in our article on how to talk about money.
You will want to find someone who is in a similar position to you or who is a good role model. You don’t want anyone who is going to resent you for having big dreams and potentially being able to save more than you can. It’s good to find someone who is happy with their own financial situation, or who has clear goals for achieving their own financial goals.
Financial advice can help you to achieve your goals and dreams. Speak with an Adviser about how we can assist you on your path to financial freedom.
What you need to know
This information is provided by Invest Blue Limited (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
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