Planning an around-the-world, year-long tour of the globe? London, Paris, New York, Tokyo and Tibet, here you come! Or perhaps you’re stashing away cash for the big day and pulling out all the stops for your wedding – a sunset ceremony, string quartet and jazz band, and a couture dress made by your favourite local designer. You might even be putting money away for your dream home or renovation!
In any case, whether you’re anticipating a particular momentous event or you’d just like to have a nest egg for a rainy day, saving money is great to get into the habit of. We’ve compiled a few tricks that may help you get to your money saving goal more quickly.
1. Get in the habit
Get into the habit of saving – the earlier you start the better. Parents, start teaching your children how to save with a kid’s savings account. Many major national banks offer savings accounts specially designed for kids, with goal setting, tracking and rewards for consistent savings.
2. Set goals
Set goals and commit to them. Start with small, manageable amounts. They might seem insignificant at first, but as you watch that bank account balance grow, saving will become easier. Your goal may be a specific financial amount of your own choosing or it may depend upon an item you’d like to purchase (like a new computer, holiday or house). Setting goals motivates you to save. If you need help setting your goals, use this Savings Goals calculator to get you started.
3. Set a budget (and stick to it!)
The B word sounds boring, but it is really important to set a budget so that you know how much you can spend and where. Often, we get ourselves into trouble when we spend more money than we have coming in each week. You can set a budget anytime – you don’t need to wait for the beginning of a new year or month, you can start today! Not sure where to begin? Try this easy to use budget calculator from the Australian Securities and Investment Commission.
4. Track your spending
Don’t know where your money goes every week? You’d be surprised how a few seemingly small purchases add up. Try tracking your spending, even if only for a few weeks; it’ll give you a solid idea of where your money goes and how those sneaky impulse purchases can really burn a hole in your budget. Keep all your receipts and put them into a notebook or journal each week, or (if you love a good smartphone app) try Spending Tracker.
5. Change your spending habits
Once you’ve tracked your spending habits, you’ll be able to see a few clear places you could cut back and save. Maybe you have a gym membership you rarely use or a subscription to a newspaper you never read. These expenses may be small on their own but they soon pile up.
6. Ditch the landline
Although a landline may be important for some, most of us can do away with our landline, opting to use our mobile phones instead and getting a naked DSL plan for our home internet. If you have a home phone line that you’re paying for and never use, ditch it and put the money into your savings account.
7. Bottle your own water
Grabbing a bottle of water at the grocery store may be convenient but it’s expensive. Australian bottled water can cost 2000 times more than its tap water equivalent. Yes, you read that correctly – 2000 times more! If you prefer bottled water because it tastes better to you, invest in a water filter and fill up your water bottle before you leave home.
8. Drink less coffee/alcohol
This may sound scary, but bear with us. Coffee is an expensive habit. The average cup of coffee costs $3.50 in Australia. If you have a coffee every weekday, you’re spending $17.50 a week on coffee which works out to over $900 a year. And that’s if you only have one cup a day! Cutting back on the amount of coffee and alcohol that you drink will make a huge difference to your budget, and it has the added benefit of being a healthy choice too.
9. Eat at home
Eating out might be more convenient but restaurant or café food can be pricey, and many times, it’s actually not as healthy as the food you could cook at home. Borrow a few good cookbooks from your local library and try out a few new recipes. You may be surprised to see how quickly your culinary skills develop and how much more you’re saving.
10. Pack your lunch
Take a packed lunch to work instead of grabbing lunch at the cafeteria or the local lunch bar. Check out these simple, healthy and delicious brown bag lunch ideas for grown-ups.
11. Meal plan & shop with a list
Instead of wandering aimlessly through the supermarket aisles and throwing food into your trolley on a whim, plan your meals in advance. Not only will this save you the hassle of trying to decide what to make for dinner each night, but it will also help to prevent unnecessary spending at the shops. Make a grocery list based on your meal plan, making sure you include any essential cleaning products and paper goods, and stick to it. Online grocery shopping with delivery is also an excellent way to shop to a budget because that way, you won’t be distracted by all the in-store promotions and advertising.
12. Bulk buy
Where possible, buy bulk quantities of toilet paper, laundry detergent, paper towels, etc. Buying a 24 pack of toilet paper instead of a four pack will work out to be cheaper in the long run – just make sure you have a place to store it all!
13. Buy on special, not by brand
Humans are creatures of habit. Fight the urge to be ‘brand loyal’. Frozen peas are frozen peas, regardless of the package that they come in. Buying store brand or other brands that are on special will add up to extra savings at the checkout.
14. Reduce your energy consumption
Energy bills stack up, so look at ways you can reduce your energy consumption and increase your savings. Check out our post on Quick and Easy Ways to Reduce your Energy Consumption without spending a fortune.
15. Save at the bank (bank fees, credit card fees and ATM fees all add up)
Many banks offer no fee accounts, low or no fee credit cards, and low interest credit cards too. Don’t pay any unnecessary fees to your bank. Whenever possible, try to use your bank’s ATM to avoid paying ATM fees.
16. Use the library to borrow books/DVDs
If you love to read or watch DVDs, dust off your library card and borrow books and movies instead of buying them. It’s free, it’s easy and it’s convenient. Many libraries also offer members access to online subscriptions for newspapers, magazines and e-books too.
17. Price check
If you’re planning on making any big-ticket purchases like electronics, insurances, cars or appliances, always compare prices to make sure you find the best deal.
18. Plan holidays ahead of time
If you’re planning a holiday, do it in advance. Flights and accommodation are cheaper the earlier that you book them. Watch out for seasonal specials and research the best/least expensive times to visit your selected destination. Many destinations have low season and high season prices, so if you don’t need to visit a place for a specific event at a specific time, look at travelling off-peak.
19. Pay your bills on time
Avoid late fees by paying your bills on time. Not only will this protect your credit rating in the long term, but paying your bills on time will help you avoid nasty late payment fees.
The Final Word: Keep Your Eye On The Prize
Saving for the future is important. You never know what what’s around the corner and what important, money-based decisions you might have to make, such as buying a house, planning a holiday or starting a family. Saving for these types of events is easier because they’re fun and exciting, and we can see that we get something out of our scrimping, saving and sacrificing. However, there are other less enjoyable things that life can throw at us, such as illness, injury, or job loss, which may mean that our precious savings for that epic holiday have to be used for less interesting things such as groceries or rent payments. Protecting your income with income protection insurance is one way that you can safeguard your savings from being appropriated to pay for unforeseen life events.
Income protection insurance is a form of life insurance you can take out to help protect your finances if you are suddenly unable to work due to illness or injury. It could pay you up to 75% of your regular income until you are able to return to work. Everyone’s life situation is different and you need to take these differences into account when looking at income protection insurance. You need to select a policy that will cover your unique needs and financial situation, so be sure to check each policy’s details carefully.
You never know what life will throw at you, but with income protection insurance, you’ll have peace of mind that your precious savings will be safe and you’ll be able to meet your financial obligations. Compare income protection insurance options today and enjoy saving towards that holiday, house, or special day.