5 pro tips to supercharge your savings

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A quick introduction; my name is Alex Wilson and I am the founder of Savings Guide – a blog about saving money and getting ahead. I am looking forward to occasionally adding content to the Mozo blog – for those who want to stay in touch, you can join my money saving newsletter here.

I’ve spent the better part of 8 years writing about tactics to save money. Most of these tactics involve ‘going without’ or significantly reducing your spending to pocket immediate savings.

But let’s be honest. These same old tips get a bit boring don’t they? ‘Take your lunch to work’, blah blah blah. These tips use the same methodology – that of which ‘every dollar adds up’ and relies on us to make changes to our behavior today to drive significant savings over the longer term.

So for those of us who are a little savvier with our money and have a strong desire to grow our savings and expedite our debt repayment timeline – what can be done?

Here are some advanced tips to really boost your savings and free up some cash:

The excess on your yearly insurance premiums – instant money back

The ‘excess’ rate on your insurance is the amount of money you would have to pay should you wish to make a claim. You can vary your excess to reduce your yearly premiums as most insurers have a ‘default’ excess rate which is neutral.

Have you already paid your yearly insurance premiums? No worries. Ring your insurer and ask to increase your excess – they will re-actively change the excess and refund you the savings via a cheque. The trick here is to go as high as your appetite for risk can allow so think long and hard about what you are willing to pay should you ever need to claim.

For me, I haven’t claimed on certain insurances ever – so I go higher on those ones to pocket year after year savings.

The debt slice and dice – keeping you forever in debt

Do you have a home loan? Perhaps a delinquent credit card that you are struggling to pay off? The trick to repaying debt (and in turn saving vast amounts of money in interest and freeing up cash flow that was otherwise reserved for debt payment) is making a lump sum repayment and then requesting that your limit be reduced permanently.

People often ‘pay extra’ only to ‘redraw extra’ a few days later.

Do something about it and every time you make a significant lump sum repayment – call your lender and ask them to reduce your available credit permanently. The money is no longer accessible and your debt (and in turn repayments) will be permanently reduced. Use the money you save on interest and repayments to boost your savings account.

Food wastage is costing you over $1K per year

I won’t dare start going on about ‘cutting out a coffee a day to save $3’ – you’re smarter than that and the last thing we need is more tips that are about as meaningful as a marriage certificate to Shane Warne.

Though know this; according to the NSW’s Governments study on food wastage, households on average waste $1,036 per year on food.

This is due to us over buying, over cooking and having no idea how to properly store food. 60% of that $1,036 is from wasted fresh produce and throwing out leftovers.

Why not re-learn how to cook exact portion sizes to avoid wastage and become more stringent in your management of fresh produce? An easy way to save a heap of money per year and perhaps reclaim a few belt loops in the process.

Also note that the $1,036 is an average figure. You could save even more (or less) depending on just how good/bad you are with food wastage.

Learn to see everything as a percentage

While not an actionable tip to save money right away, learning to view your purchases and savings as a percentage can greatly help you get back in touch with your finances.

For instance, it helps you assess value and I have a great example of this. It’s Saturday night – you want to have a drink with your friends. Do you invite them over or visit the trendy little small bar down the road? Well if you do the math, a beer at home will cost you about $2.00 a bottle. The same beer at the small bar will be $10. Yes we can see this is $8 more expensive, though sometimes that doesn’t really hit home just how much we are wasting.

As a percentage, the beer at the small bar is 400% more expensive – if that doesn’t indicate just how much money you are wasting what does? A great way to motivate yourself into making smart financial decisions.

Apply this thinking to everything you do – get the old price you paid for something and then the new cheaper price – calculate the percentage difference and revel in your success of saving money!

See our percentage calculator to do some of your own tests as percentages have a habit of confusing people.

The notice saver strategy

Notice Savers are yet to really hit off in Australia. Basically they are a hybrid between a high interest savings account and a term deposit.

The basis of a notice saver is that you have to serve a ‘notice’ period after requesting access to your savings. So say you had a 60 day notice saver – once you request to withdraw the funds back to your account, you must serve 60 days before the money arrives in your account.

This helps you delay the withdrawal process and perhaps put a temptation blocker in place (as we all know that 99% of saving money is removing temptation to spend).

Why not create a notice saver with the biggest possible notice period and then ‘gamify’ your savings experience by making it a game to add money to the notice saver whenever you can? It’s like adding money to a bullet proof piggy bank that you cannot open for a number of days, weeks or months.

For me, I login to internet banking and round down my account balances to even numbers by transferring money to my notice saver. This means I might have $116.54 in my everyday account, I will grab $16.54 and transfer that to my notice saver. A great way to constantly add money to your notice saver while never really missing the money.

5 pro tips to supercharge your savings was last modified: August 14, 2013 by Alex Wilson

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3 Comments - Write a Comment

  1. I have opened an online saver account as I find this has the same if not better interest rate than term deposits and the interest is credited to the account monthly. Then when the interest is added to my balance I round out to the next thousand dollars and this has given me more incentive to save as I now like to watch the balance grow.

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  2. I know a couple who are building a house and instead of paying mininum amount per month they are planning to pay extra and pay fortnightly so as to reduce their interest. The money is going into a special bank account to achieve this.

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  3. Hi there!

    Thanks for the article! I do agree with you, managing your savings is as important as making money itself, moreover, it can be the best way of making money!
    I do advise everyone wondering what to do with their funds to visit a webpage such as http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php
    in which you can see a ranking of the best funds of the year.

    However, there are also some tricks and facts as the ones you comment that should be taken into account when thinking how to boost savings. Let me add a couple more to your list:

    Start an Emergency Account :Build up three to six months’ worth of living expenses in a separate kitty. This helps you avoid landing in high-interest debt, paying penalties to access retirement money or raiding your long-term savings if you have unexpected bills or lose your job. Keep the money in an accessible money-market account that earns some interest.

    Don’t Forget Taxes: Those pesky taxes we all have to pay can leave you with a smaller windfall than you realized. Many of those who get a raise or bonus end up blowing more than they’re actually getting. Sometimes they’ll know they’re getting a $1,000 bonus and go out and spend $1,000, but when they get the check, it’s just for $600 because of taxes.

    I hope that’s helpful!

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