What can you really save?

Saving is a little like dieting - there is a lot of information out there and a lot of it is conflicting. So how do you really know what the right way to save is?

The fact is your savings patterns can often be unique to your particular financial and lifestyle situation. If you have a family you might find it cheaper to buy things in bulk, especially items like toilet paper and cleaning products - things that have a long shelf life and don’t go off. However, for other items that do have an expiration date, this may end up costing you more in the long run.

When it comes to getting better with holding onto your money, it pays to put a few simple structures in place that never get broken, no matter what.


Pay yourself first - Always!

It’s good to decide what your own pay day is and stick to it. It may be 10 per cent of your monthly or weekly wage, you may even be able to save more. Make this a realistic number and stick to it, regardless of life pressures that crop up. This is money that is not available to you and will become your nest egg. Don’t ever be tempted to crack it. This is on top of the super your employer is already paying, and if you own your business, make sure you pay your super on top of this savings amount. You are going to need it.

Plan your expenses in advance.

How many times would you like to eat out per month? Budget for it, and stick to your word. The more you plan in advance, the less you are likely to be putting things on credit card down the track. Make the rule easy. Whether it’s buying your lunch at work or taking the kids out on the weekend, figure out each month what’s the most you are willing to spend, tell the rest of your family, and make everyone accountable to that decision. It works.

Put your utilities on direct debit and ask for the corresponding discount.

Most companies give them. This can add up - also ask them to backdate if they have not offered it to you before. This can be a significant credit and allows you to save money that is otherwise spent on utilities.

Look at what you are paying on your entertainment services and internet/phones.

There is always a better deal on offer and you may be paying too much because you have not asked. Also consider services like Netflix for entertainment, which has one monthly charge for all the content you can consume, rather than paying for what you use or for particular channels. And check your mobile bill. Are you using all your data? Could you go on a cheaper plan? Taking notice of all these things that can add to your savings pool on top of what you are already saving.

Can you ride share to save petrol money?

Sell things on gumtree or Uber? Rent out an extra room on Airbnb? There are so many additional ways to make money online now, look into it. That extra money you make can become a personal challenge to see how much you can save and how fast. Just be prepared to do things a little differently to get those extra dollars in the door.


Saving money is really buying yourself financial freedom. While it takes some work, the results are definitely worth it.

 

Until next time,


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.

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