In anticipation of a global recession and the current cost of living crisis, an RMIT finance expert is available to provide insights into smart spending.
Angel Zhong, Associate Professor of Finance, School of Economics, Finance and Marketing (0433 810 413 or firstname.lastname@example.org)
Topics: recession, cost of living, saving, budget, pay-day lending, buy-now-pay-later
Make a budget to understand your financial situation
Having a good plan can afford you more financial freedom and help you strike an optimal balance between your income and spending.
Track your spending, income, investment and set aside money for emergency for the rainy days. There are a lot of free online budgeting websites and apps to help do this.
Try to establish your own budgeting framework by allocating a certain proportion of your money to spending for needs, recreational purposes and emergencies.
Once you have a budgeting framework, stick with it but also make sure that you review it on a regular basis, as your life situation and priority may change.
Before purchasing anything, spend some time comparing prices of goods that you are after. There are free online resources that help compare prices and track the history of goods.
Try not to let your impulse control you when business run promotions and large-scale sales, such as Click Frenzy. A solid budget will help you work out what you really need instead of buying what is on sale.
Be wary of short-term and pay-day lending platforms and buy-now-pay-later (BNPL) products
While they may offer short-term solutions when you have urgent liquidity needs, they come with high interest rates. They may also induce long-term financial pain if you don’t repay on time.
While you benefit from an extra channel of payment when your budget is tight, BNPL may give you extra debt hangover.
Watch out for marketing traps
Consumer research experts may design lucrative marketing events to lure you to buy things that you don’t really need. They may do it via limited time sales to trick you into thinking that you will miss out if you don’t buy. But in fact the sale prices are not that attractive.
There are also other marketing traps such as ‘buy two and get one free’. Many consumers are attentive to the ‘free’ item without realising the actual discount rate.
Dr Zhong’s areas of research include asset pricing, investments and capital market, including stock market anomalies and multi-factor asset pricing model. Her research has been published in journals including Journal of Banking and Finance, International Review of Finance, International Review of Financial Analysis and Pacific-Basin Finance Journal.
Interviews: Angel Zhong, 0433 810 413 or email@example.com
General media enquiries: RMIT External Affairs and Media, 0439 704 077 or firstname.lastname@example.org
Acknowledgement of Country
RMIT University acknowledges the people of the Woi wurrung and Boon wurrung language groups of the eastern Kulin Nation on whose unceded lands we conduct the business of the University. RMIT University respectfully acknowledges their Ancestors and Elders, past and present. RMIT also acknowledges the Traditional Custodians and their Ancestors of the lands and waters across Australia where we conduct our business - Artwork 'Luwaytini' by Mark Cleaver, Palawa.