Does your New Year’s resolution include some variant of ‘stop spending money on…’ or ‘start saving for…’? If so, you’re not alone.
We’d all like to hold onto a few extra dollars if we can, and thankfully there are heaps of quick and simple ways that you can start today. So whether you’re saving for a tropical getaway or just looking to cut back on your spending, check out our tried and true tips for saving in 2016.
First things first, learn how to effectively keep track of where your money goes. You’d be surprised how quickly small purchases can add up, and chances are you’ll find a lot of money going to things you might want, but not necessarily need.
In the age of the smartphone it's also easier than ever to keep track of all your receipts with free apps (TrackMySPEND, Pocketbook) or banking products like CommBank’s MySpend or Suncorp’s Budget Tracker to help you.
Once you have a handle on where all your money is going, you’ll be able to plan a realistic budget.
We all have one bad habit that sucks up money like a particularly nasty shower sponge. Whether it’s smoking, the morning coffee or the evening glass of wine, these little vices are usually something you’ll be healthier for giving up anyway, so why not use that as a way to save some money?
By skipping your daily coffee trip, you might save up to $20 a week and if you can stick to that all year, you’ll save around $1,000. Or, if your New Year’s resolution to go cold turkey on coffee was more aspirational than practical, try quitting for a week each month. You can still save around $240 in a year.
Even if you’re not necessarily interested in giving up your vice, you can still use it to help you save. You’re probably familiar with the concept of a swear jar - every time you utter a four letter word you owe the jar a dollar. You can do the same with just about any bad habit and put a dollar in the jar every time you indulge. After a while - a short while if you’re pretty committed to your bad habit - you’ll wind up with a jar full of spare change. Just try not to empty the jar until it’s full, or maybe until the end of the month, so that you have a substantial cash stash built up.
Try going to an ATM once a week and withdrawing your weekly budget. Split it up into sections like entertainment, food and transport if that helps, and then stick to it. You can take money from each section and split it up differently if needed, and don’t forget to keep track of the small change you get back. The trick is to only use the cash you’ve withdrawn. No more trips to the ATM, no using your card. The vague feeling of panic as your physical money begins to dwindle and break down into smaller and smaller denominations is a great motivator for not spending on unneeded items.
Same idea as a piggy bank - over a long time, a little adds up to a lot. If you buy a sandwich for $6.50, round it up to the nearest dollar and put that extra 50c away. You can do it manually if you’re using cash, or, if you prefer plastic to cash, St. George’s Sense account will automatically round up for you and put all your change into a savings account, like a really high tech piggy bank.
Eventually, all this spare change will add up to a significant amount. Enough to buy another sandwich maybe...
...Except that you shouldn’t be buying sandwiches. It’s common knowledge that buying lunch each day is a huge drain on your budget, especially if you’re working in a pricey area.
It’s worth putting in the effort to find some tasty and quick recipes so you don’t end up eating a peanut butter sandwich every day of the week. By being a little more organised and spending a few hours on Sunday preparing meals, you can save your lunch money for something you really want. Like shoes.
This is also good for vices you absolutely can’t give up - like coffee or chocolate. The trick is learning to sin smarter by making your own coffee in the office kitchen rather than shelling out $3.50 a pop for a takeaway cup.
This is like the 5:2 diet where you eat normally all week and then fast over the weekend, except here you spend for a week and then save for a week. The key is to not spend more in your ‘on’ week than you normally would. If you’re buying twice as much in this week as preparation for the next, it kind of defeats the purpose.
So if you’re a hoarder of canned goods, the off week can be spent cleaning out the pantry and making use of all that extra food. Or it could be as simple as not having pizza delivered.
Once you get the hang of it, this can be really effective and you might even find the good habits from your off week influencing your usual spending.
What’s the difference between Coles’ brand flour and name-brand flour? Not a lot. On basics like flour, sugar, salt and spices, the ingredients are generally the same, no matter what branding is on its label.
So don’t be embarrassed buying generic products when you go shopping - these days they’re often just as good and can end up saving you quite a bit.
This one takes a bit of commitment because the payoff may not look like much at first. You can do little things like turning off lights and air conditioning, and ensuring your appliances aren’t plugged into the power point when you’re not using them, or you can think a bit bigger - like installing solar panels and green energy solutions throughout your home.
Keep in mind that this is a long term solution that might even cost you a bit in start up. Check out Mozo’s energy saving tips if you want to know more.
For big ticket items or something you suspect is an unnecessary splurge (the newest version of the iPhone is not that much better, trust me), abide by the 30 day rule. See it, love it and then let it go. Don’t buy it for a full 30 days and you might find your interest wanes. If you still want it after that time has passed then have at it - this way you’re less likely to wind up with buyer's remorse and find yourself wishing you had held onto your hard-earned cash instead.
Now that you’re on your way to keeping your resolution and saving yourself some cash with our handy tips, the next step is to find somewhere to park all those savings. Under your mattress is just not a viable option these days, so check out some of these great savings accounts with high interest rates attached: