Simple savings tips anyone can apply
Find out how to save money in a world that encourages spending.
Finding it hard to save for your first home? Or perhaps you're wondering when your overseas trip will become a reality.
There are a number of simple ways to save for that car, holiday or home deposit that won’t threaten your lifestyle – as long as you learn to live by moderation.
Here are some tried and true tips my family employ to save for the things that matter to us:
“Well, our expenses outweigh our salaries.”
“Maybe if I qualified for government benefits, I’d have a better lifestyle."
"I can justify that carton of beer at the weekend."
"Getting my regular mani/pedi is my only treat."
"It's just easier to get KFC for the family on the way home."
There are a million excuses you can make. Step one to saving money: quit making excuses.
And now we move on.
Stick to your shopping list (but include one perk)
It’s a vicious cycle. When we don’t have a lot of money, we tend to spend more on ‘inexpensive’ items such as chocolate biscuits, ice-cream or the occasional take away, and we justify it by saying “I don’t drink or smoke. I don't go to the cinema or go on annual holidays like other people.” So we spend a few dollars here and there, and before you know it, you’re spending an extra $50 per fortnight on ‘inexpensive treats’.
When you next buy your groceries, write a strict list of all the items your family needs… then add only one treat that will last your family until the next grocery shop.
In living by this rule and savouring one packet of Arnott’s Tim Tams (Family Pack) per fortnight as a family, we save approximately $40 a fortnight on treats we never really enjoyed in the first place.
Make dinners that provide leftovers
Earlier this year, we were quite lazy with our work lunches; this was due to having no air con during the summer, meaning it took every effort just to stand in the humid kitchen preparing tea and toast, let alone preparing delicious dinners.
With summer now passed, we are back into a routine of planning, shopping for and cooking dinners that provide our family with leftovers for lunch. From Sweet and Sour Chicken cooked in a homemade batter, to a naughty Potato Gnocci in Roma pasta sauce (thank you, Aldi), we are now left with at least 4 lunches for use throughout the week.
Consider how much you’re spending on your lunch at present. McDonald’s and KFC may provide you with some satisfaction at the time – especially if your job is physically demanding, but the cost to your bank account is astronomical.
In employing this change, my family now saves between $200-$300 a month.
To Café or Not to Café?
How much do you spend on that daily (or bi-daily) coffee from the McCafe drive-thru or cafe near to the office? Many people spend on average $6 per day on café-style coffees. That’s $30 if buying a coffee 5 days a week.
Sure, the crème is amazing, but so is an extra $30 p/w in your account. Go with the instant coffee and save $1560 annually.
Weigh up the cheapest mode of travel for your typical work day. Consider things like:
cost of petrol per week
cost of parking
the threat of parking tickets
cost of regular car service (if your commute is particularly long)
bus routes + Opal max fare per day
trains + Opal max fare per day
If you are lucky enough to live and work near to public transport that is easily accessible and its use syncs with your needs, consider the savings.
My family are rather lucky to live near to good and affordable public transport; however, while it does save us a lot of money, it can certainly be difficult when commuting when you have a lot to carry.
While this mode of transport requires me to plan ahead and put in more effort than simply hopping in the car, knowing I’m saving money on parking and petrol makes the effort all the more worth it.
Hot Tip: Thinking of heading out this weekend? Sydney buses and trains offer $2.60 all-day travel cap every Sunday. Definitely worth it!
App, App and Away!
Does your bank offer a phone app? If so, download it immediately.
Most banks offer useful banking tools on their apps and desktop sites, including breakdowns on your expenditure. The automation not only saves you time, but categorises your spending into groups such as Home, Health, Groceries, Entertainment, Eating Out and so on. You also have the ability to re-categorise your purchases if needed.
This feature is a real eye opener and gives users an instant visual outlook on their finances.
Well worth the (free) download.
Loans and finance options
Avoid taking out loans or applying for credit on unnecessary items.
Need to replace your car? Dive in to the many reputable online sites selling used cars from both dealers and private sellers. Information on these vehicles is always readily available via www.revs.com.au when a VIN is provided, and the final price is almost always negotiable.
If you need to take out a loan for a car (or other expense), best it be a small loan you can repay as soon as possible, as opposed to a finance agreement that you’ll be paying off with interest over a much longer period of time.
(Side note: new cars are known to have mechanical and technical issues too, and repairing these can prove just as painful – if not more with the added stress of insurance, finance contracts and so forth).
Sometimes a loan is inevitable, and our family has taken out small loans in the past to ensure we have a working car to get us around. But the main thing is to ensure you can:
a) pay back to loan in under 6 months and
b) ensure a steady cash flow.
Remember to compare the loan types available to you, and ask your bank’s customer service representative as many questions as you need. In doing so, we were granted a small variable loan that allowed us to pay off the amount in half the agreed time without incurring any fees - and we avoided excessive interest.
This is another method (similar to Zip) which splits a sales amount into 4 even payments to be paid off over 8 weeks. You are granted a small amount at first, and over time your spending amount increases when you prove a reliable candidate for further credit. It’s an incredibly handy service - if used with vigilance.
The way to use AfterPay successfully is to only purchase what you need (“hubby needs new work trousers – stat!”), and avoid buying unnecessary items (“ooh, that coffee machine looks gooood…”).
The way my family uses AfterPay is to make one small necessary purchase per month; this allows us to increase our total borrowing power for any emergencies (dental work, anyone?) while maintaining a steady cash flow.
Hot Tip: Use AfterPay only when you can afford to pay in full; this maintains your cash flow while increasing your credit over time.
And when it comes to babies...
If you're a parent or guardian to a baby, it’s time to roll up your sleeves, fill that nappy bucket with hot water and Sards, and start using those cloth nappies.
We used disposable nappies for 7 months due to a number of factors beyond our control – and resented the monetary outlay at each grocery shop.
Invest in pilchers! These nappy covers were very popular in the past. But in recent years, retailers realised they were losing money on disposable nappies, and so pilchers became almost impossible to find.
Visit eBay and pick up a couple pairs (I recommend this seller's product from experience). The thought of washing dirty nappies may make you groan at first, but it's really not as hard as you may imagine... and a baby with a huge padded bottom is just super cute.
We manage to get 5-6 cloth nappies from each set of pilchers, so that’s a saving of approximately $15-20 per week. Baby steps, people.
There are a number of small changes you can make to your family's spending habits, but it all starts with a little self-discipline.