Five tips that will help you save money
The one thing that most financially successful people have in common is that they all have a plan and they stick to it. The best intentions in the world just don’t cut it if you don’t have a plan for where you want to get to. Your plan doesn’t need to be hard – even small things that you commit to doing can make a big difference over time. Here’s our 5 top tips that will help you to start saving money from today.
1. If you don’t have it, you don’t miss it
The simple fact is that most of us spend up to our income, and if our income increases, somehow our spending does too. But if you don’t have it you don’t miss it, so our top tip is to automatically move some money out of your everyday account each payday into a separate savings account. If you set it up as an automatic payment you won’t need to think about it, and make sure that you transfer it to an account that has no account keeping fees or a competitive interest rate. Just $20 per week will see you saving over $1,000 a year.
Some banks such as Bendigo Bank and Bank of Queensland have term deposit options starting from $1,000, so once you have this amount saved, consider rolling it into a term deposit so you can start earning interest.
2. Record your spending
If you get into the habit of recording your spending, you’re on the way to getting in control of your money. TrackMySpend is a free money saving app that’s available for iOS and Android - it lets you easily track your personal expenses by category, and each time you add an expense, you indicate whether it’s a “need” or a “want”. You can even set a realistic spending limit and the same app can be used across multiple devices, so household spending is recorded regardless of who bought the item.
3. Set a budget
There’s no doubt about it – if you set a budget for your household expenses and stick to it, you will save money. The great thing about the TrackMySpend app is that you can set spending limits for each category of spend, so you’ll know when your expenditure is getting close to your budgeted amount each week, fortnight or month (depending on the timeframe you set on the app).
We recommend first recording your spend for a month, then exporting it to excel so you can take a good hard look at where your money is going. Once you’ve done that, set some realistic budgets that will leave you with some extra cash each month (that you can set up to automatically move to your savings account), then enter your budgets into the TrackMySpend app. It’s a simple budgeting tip but it really will help you to save.
4. Switch providers
There are some expenses that we just can’t get away from – electricity, insurance, phone, internet, food and depending on your circumstances, mortgage or rent.
It’s easy to get complacent about these expenses because they just happen and we put up with them. But it’s a good idea to shop around to see if you really are getting a good deal. Sites like One Big Switch offer group discounted rates on a wide range of everyday services such as insurance, energy and telecommunications.
If you have a mortgage, try picking up the phone to call your lender and see if they are willing to give you a better deal, or contact a broker to see if you’re getting the best rate.
Food is a household expense that really adds up but don’t forget about your local ALDI – it’s a great place to save on everyday items.
5. Overpay the ATO and bank your refund
Ok this one isn’t for everyone but if you are a chronic over-spender and just can’t control your finances, it’s an option you might want to consider. Here’s how it works:
Every Australian is entitled to a tax free threshold, which means you don’t need to pay tax on the first $18,200 you earn each year. By electing not to claim the tax free threshold on your wages, you’ll implement a strategy to force-save as the ATO will receive more tax from you than you actually need to pay.
This means a nice refund from the ATO at the end of the tax year. How much can you expect to get back? Well if you earn $45,000 a year, you can look forward to a refund that’s close to $6,000 – a nice way to save if you don’t have the discipline to do it yourself.
No matter what you want to save for there are plenty of ways to go about it but if you ever find yourself in need of some extra cash, don’t forget to check out our flexible mini loans that are simple, easy and quick.