It’s often said that those with money have it because they don’t spend it. They’re savvy frugaleers who know where every cent is spent and exactly how much they have squirreled away in savings. Then there’s those who are keen to save but still wonder where their wages have gone at the end of every month. If you are perplexed by month’s end, read on to find ways you can spend less, yet have more.
1. Use cash only (for a short time)
Before you go down the route of ‘get-rich-quick’ schemes, figure out how much you’re spending and where. The best way to do this is to use only cash for a few months to get a baseline of your expenditure.
First, work out how much you think you spend per week then withdraw that amount of cash on the same day every week and use it for all purchases (no sneaky Eftpos tapping). It’s hard to do if you’re not used to it, but the exercise is a great way of gauging what you’re really spending. All those cups of coffee and brunches add up over the week. Once you have an idea of your true spending habits you’ll be able to cut back where needed. It will also make you more mindful of how you use your cards once you reintroduce them.
To get a true reflection of what you’re spending, don’t cut back at this time. Spend like you normally do to get a realistic picture of your normal spending habits.
2. Budget Budget Budget
If you’ve been reading about ways to manage your personal finances for a while, you’ll see the ‘B’ word mentioned ad nauseum. That’s because budgets work. It’s sticking to them that’s the problem.
There are a number of online tools that can help you organise a budget, each vary according to the user’s needs. You may have to try a few tools before you land on one that works for you.
While it’s easy for some to be self-disciplined and follow their budget, we’re not all made equal. For some, it’s incredibly difficult. If you’re one of those people, have a goal in mind to help keep you motivated. Start with something small, it doesn’t need to be a holiday. It could be a new bed or bike…something attainable.
3. Track your spending
By tracking your expenditure you know where your money is going and can modify your habits as you go. A number of apps for Android and iPhones are available for download, through which you can nominate a spending limit, create sections that follow your frequent expenses, set reminders and view your spending history.
Be aware that some tracking tools may ask for your bank details, including passwords to access your accounts so they can use their tools.
If you decide to use a tracking app, it’s best to avoid using cash while tracking. Using card means you have an electronic record of all transactions so you don’t have to enter payments manually. However, you still need to be mindful of how much you spend. Research shows that people are likely to spend more if they use plastic cards. It’s much harder to part with the physical coinage.
4. Cut the luxuries
Ditching the luxuries takes a lot of discipline, but it can be done. Look at the things you’re buying regularly, then see what you can do without. You’ll be amazed how much money you’ll save without trying too hard.
Why not watch a vlogger, free documentary or movie on YouTube instead of going to the movies. Invite your mates around for homemade pizzas instead of eating out, brew your own coffee in place of takeaways and cancel your magazine subscriptions—go for the sustainable option and ask for your friend’s once they’re done.
5. Save a little
When drawing up a budget it’s important to factor in savings, too. Putting even a little money away each week or payday can add up. As Paul Kelly once said “From little things, big things grow.”
Start small, especially if you’re on a tight budget. Five dollars a week will give you enough for a good Christmas fund, twenty dollars a week means you may be able to get that holiday you’ve been yearning for.
If five dollars is still too much to part with, check out Raiz Invest (previously Acorns Australia). This handy, free app aims to make investing simple for everyone. They offer a range of ways to invest but one option, “Round-ups”, works by rounding all your bills to the nearest dollar and invests the money for you. This unique way of micro-investing allows even those on the tightest budget to make money.
6. Pay off your debts
Few people like having debts hanging over their head, especially if interest accrues month after month. When you’re drawing up your budget, include your credit card and loan repayments. It’s up to you how you want to play this. Either pay off your higher interest rate credit cards first and make sure payments are made on time to avoid unwanted charges. Or if you have multiple debts then pay off the smallest amount first before moving onto bigger debts to build up some momentum. It’s always a good idea to pay above the minimum amount owed, with the aim of paying the balance off every month.
If you’re having difficulty paying more than the minimum payment, think about transferring your balance over to a 0% interest card. Have a look at how long the interest-free period lasts and calculate how much you have to pay per month to have it cleared by the end of the offer’s term.
7. Do more for yourself
If you have a cleaner or gardener, it’s time to pull your sleeves up and get down with the commoners. Paying others to do your housework is a massive expense that you don’t need. If you’re time-poor and are prone to buying takeaways, grab a cookbook and have a go. Other things you could do yourself include: washing your car, filing your own taxes and doing your own laundry.
Budding chefs, try to plan your meals for the week, as this helps reduce costs in the long run. Cooking lasagnes, casseroles or stews allows you to freeze meals for later in the week.
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8. Buy more second-hand goods
Shopping at second-hand stores doesn’t mean that you are not going to get quality products. In fact, more often than not, many op shops will carry designer and brand names. If you’re lucky you may happen upon some items that have never been used and still have the price tag on them. Wearing second-hand clothing (or vintage, if you’re being fancy) is fast becoming fashionable, and much better than ‘fast fashion’. It’s not just clothes you can buy either; books, sports equipment, and furniture are all in demand.
Avoid the antique stores—wait until you’ve saved a few bob before you frequent those establishments! You could also try Gumtree, Facebook Marketplace or one of the community buy-swap-sell groups on Facebook.
9. Stay home more
There’s no question, eating out and socialising is fun. It’s the reason many people work in the first place—to fund their social life, so having to stay in might seem like a big ask. Just remember, you only need to cut down on the number of times you go out per week. If you visit the pub 3 times a week, cut back to once. We’re not asking you to become a hermit.
Yes, eating out or getting a take away seems like an easy option after a long day at work, but it really is a major drain on the bank balance. If you’re good and track your spending you will realise how much you save when you cut down on dinners out and drinking sessions.
When you stay in instead of going out to an expensive bar or restaurant, put the money you would have spent straight into paying off a debt or invest fund like Raiz and watch it grow.
10. Holiday on points
Of course it’s hard to stay home! Everyone needs a holiday sometime but it can be expensive. One way to make your credit cards work for you is to use them to pay your bills every month—as long as you’re able to pay them off every month.
There are a number of cards available that allow you to accrue frequent flyer points on every spend. Once you have enough you’ll be able to save on flights by using ‘Points and Pay’ or by paying for the whole flight using points.
Use your airline’s points calculator to work out how many points you need for the destination you have in mind. Write that amount down somewhere you’ll see every day and aim to reach the magic number before you book. If you can’t pay for the flight outright, you may be able to use the points to upgrade. Who doesn’t love an upgrade?
11. Avoid your wealthy mates
While it may be lovely to hang around with your rich buddies, they will inevitably make you spend more money. Of course they don’t do it intentionally, but you may often feel obliged to eat or drink where they choose. Sure it’s a nice life, but it’s somebody else’s.
If they’re good mates, tell them you’re trying your hardest to save and get them to meet you halfway.
12. Get a flatmate
Rent and mortgages are way up there in terms of pricey living expenses. Renting out your spare bedroom is a great way to help pay off your mortgage faster.
If you are renting, having a flatmate (or two) can also assist you in being able to afford the place you want (and in the location you want).
Having a flatmate means you can also share the costs of your utility bills including home internet, gas, electricity etc. If you are not a people person and therefore this budget saving hack does not immediately stand out to you, narrow your flatmate search to someone who has a completely different schedule to you i.e. someone who does shift work. Then you won’t even notice that they are there.
If you are a keen traveller you can earn points by putting your rent payments on a credit card through a provider such as Rental Rewards.
13. Revamp your utilities
Take a look at all of your utility bills and then shop around to see if you can find a better deal. You need to look at each company in turn—electricity, gas, Foxtel, and see if there are any deals where you can snowball your utilities, getting one company that will service all, or at least a few.
Phone companies often have deals with specific companies but can be expensive, so opt for Freeview instead. Keep your mobile, dump your landline. You could save yourself a bundle.
14. Walk everywhere
Thanks be to OPEC! Fuel prices are rising and the cost of using public transportation is increasing. Why not get where you can the old fashioned way, with your own two feet? You could walk to the supermarket, the bank, or to work if it doesn’t take too long. Once you get into the habit of it you’ll want to walk more. It will also have the advantage of saving wear and tear on your car, and help you get fit too.
Charity Miles Walk&Run Tracker is a free app that donates to a charity of your choice while you walk. Featuring 37 charities including the World Wildlife Fund, Save the Children and Habitat for Humanity, corporate sponsors pledge money for every kilometre you walk. It may not make you money, but it’s a great way of giving back when you can’t always afford to.