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Are you savvy with your spending?

Struggling to keep euros in your purse or bank account? There are ways to help you stay ahead of the game. Economist Susan Hayes studied financial maths and economics in NUI Galway and at the age of 25 has just written her first book, The Savvy Woman's Guide to Financial Freedom.

Work out your 'financial thermostat'

Imagine you find out that you have, say, an extra €50,000 in the bank. What is your first reaction? If this amount is a signal to spend, spend, spend, it means you are actually uncomfortable having so much money. Repeat with €5,000 and again with another number until you find that spot where you wouldn't feel the need to spend it. You should be working to raise your 'financial thermostat' set point, otherwise you will always pull your bank balance down.

To reset your financial thermostat, start to

daydream your way to your ideal lifestyle

Identify a tangible, identifiable financial goal. Instead of "I want loads of money", articulate exactly what you mean, for example, "I would like €10,000 in a savings account". Daydream about the impact this would have on your life and while doing so, listen to all of the important doubts and criticisms that pop up in your head. Strategise to come up with ways to overcome or get around those obstacles.

observe your budget habits

Set out what you think you spend over a month and then establish a budget habit by logging in your expenses daily. Group them by category in a spreadsheet (you can download the one I use myself at

www.savvywomen-online.com/tools). From your direct debits, to the coffee on the go, to your once-every-six-weeks haircut, everything should be accounted for daily. Mine it for information about your spending behaviour - maybe you thought you spent €x on groceries, but you really spend €y and on average 30pc goes into the bin out of lack of planning.

Change your perspective

Use the concept of opportunity cost to motivate yourself. Instead of seeing saving as "denying" yourself things, or "renouncing", imagine what you will do with the money you save: what would you rather have, twenty bargain, low-quality tops or two luxury dresses that pack a "wow" and that you will be able to wear for years to come? Instead of associating cost-cutting with "doing without", start thinking about increasing value for money.

ask for help and advice from reliable sources

List off all the people who could help you get your finances in order. For example, make an appointment with the Revenue office who can help you figure out whether you're getting all the benefits that you're entitled to (according to tax experts, each person has overpaid €840 in tax). Schedule to meet all the people who are "stakeholders in your finances": your bank manager, your financial advisor, your employer, and your clients.

Put an accountability system in place

To make sure your good money resolutions actually stick, you might tell a friend the five actions you are going to take this month to improve your finances and to call you this day in February to see that you did what you set out to do.

Find out how much it costs you to make the money you make

Do a "profit-and-loss" analysis of your current income streams; how much does it cost you to go to work including work clothes, childcare, petrol etc.? Next, factor in the emotional costs: boring job? Take stress home with you? Do the same for the benefits, both financial (salary) and emotional (camaraderie with your colleagues). Then find a way to minimise the costs and maximise the benefits.

Become aware of the biases and untested assumptions that are holding you back

What opinions do you have around money and earning more? Do you think only people in business can be enterprising? Do you think "you only live once" -- and are overweight and burdened by debt as a result? Examine your beliefs around money: who gave them to you? What purpose do they serve? Do they serve that purpose well? Would you like to change or adjust them?

be creative about making more money

It might be generating a financial reward from ConnectIreland or getting paid to give your opinion to a market research company. Perhaps you could set up a side business with Jamie at Home or Avon or make a well-argued case to your boss in order to get a raise (yes, even in the current climate).

Keep moving in the

direction of your goal

Always be doing something in order to reach your goal: decide on an action step, no matter how small, and do it. Again and again and again.

The Savvy Woman's Guide to Financial Freedom is published by Penguin, price €21.45 and currently on offer in Easons for €14.37. For more information, log onto www.thepositive-economist.com