Money Saving Tips
1. Create a budget
People often think that creating a budget is going to be restrictive, but contrary to popular belief, a budget is the easiest way to reduce money stress from your life.
When you create a budget, you are creating an easy snapshot of how much money is coming in and how much is going out. You also get to see what’s left over and what’s not. So that you can start making choices about how you are going to spend your money moving forwards.
I’ve included below a very simple budget for David and Deborah, using a budget template that you too can feel free to use. You’ll notice that it’s very simple, at the end of the day, a budget shouldn’t be complicated. The figures that I’ve used are just an example, so keep that in mind when you're looking at the budget. You’ll notice that after all of the expenses have been covered, David and Deborah have an additional $125 to spend. Now what they have to do is decide what they are going to do with that money, should they save it, spend it or pay off debt or put it toward their emergency fund? If you have debt, put the extra money each money as extra towards to principal on your debt and get them paid off faster. For David and Deborah, they could pay off their credit card and their car loan and be completely debt free!
Budget July 2019
| |
Income
| |
Job 1
|
$500
|
Job 2
|
$500
|
Total
|
$1000
|
Expenses
| |
Rent
|
$400
|
Groceries
|
$50
|
Petrol / Transport
|
$30
|
Electricity
|
$75
|
Gas
|
$20
|
Credit Card Debt
|
$50
|
Car Loan Debt
|
$250
|
Total
|
$875
|
Difference
|
$125
|
So David and Deborah’s budget gives them $125 left over at the end of each month. What happens if you create a budget and you still owe money even though all of your income has been used up? If this is you, you’re going to have to find things to eliminate from your budget or find a way to raise your income. Which brings me to point #2 - Get rid of things from your budget that you no longer want or need.
2. Get rid of the things from your budget that you no longer want or need.
Look at all of the things that you’re currently paying for and cancel the ones that you don’t want or need anymore. It’s pointless to pay for a gym membership when you haven’t walked into a gym for the last 6-12 months, or an audiobook membership when you haven’t read the books you have purchased and still have a few unused monthly credits sitting in your account. Paying for these things and not getting any value from them is damaging to your budget and likely keeping you in debt. If you aren’t using it and it’s not necessary that you have it. For example, I wouldn’t stop paying for car insurance, I don’t use it but I do need it and I’d be sorry if I got into an accident and didn’t have it. Companies use monthly re-occurring billing to keep consumers ‘stuck’ to their products and often the per monthly cost is low enough where they hope you won’t notice that you’re paying for their services even if you’re not using them. Which means that they make hundreds of thousands, if not millions from people not even actively using their product. If you’re not sure if you want to cancel yet, see if you can suspend your account for the maximum number of months. If at that time you don’t miss it at all, cancel. You can always sign up again in the future if it’s something that you want to use again.
3. Can you get what you need cheaper?
Can you purchase something that you need or want at the op shop, eBay, Gumtree, Facebook market place or buy swap and sell groups or websites for a fraction of the cost that it costs brand new? You can find so many things like new or brand new at the thrift store because they were barely used by their previous owners and you would have paid double, triples or quadruple the cost if you bought it at the regular store. I have seen good quality, solid pieces of furniture at the op shop for $10 - $50. I’m not going to deny that this furniture is often ugly the way that it is, but with a coat of paint and some updated hardware, you can turn an ugly duckling into a beautiful swan. I was at the op shop this past weekend and found this beautiful china cabinet $25, it was solid wood but it was stained a yellow-brown colour and in its current state, I can see why a lot of people would have passed it by. But with a can of chalk paint, some sealer, 4 new knobs and half a days' worth of work, someone could have a beautiful and unique piece of furniture.
I also see lots of electrical appliances at the op shop, literally for pennies on the dollar compared to their brand-new cost. If something was a fad appliance you can bet your bottom dollar that you will find lots of them at the op shop in 6-12 months. I’ve seen this with bread makers, thermomixer, ice cream makers, pancake makers etc. They are usually under $10-$15 because so many are donated each week. If you see something that you think you want and everyone is buying them, don’t be tempted to buy it right away, wait a few months and see if you can find it at the op shop or if the new price goes down. In Australia, all second-hand electrical appliances sold by a business need to be approved as safe and should be tested and tagged by a licensed electrician. So you don't have to worry about safety or buying second-hand appliances from places like the op shop, you will although need to be more careful from individuals or places like facebook marketplace, eBay etc.
4. Take it from home
The amount of people that I see every day buying food instead of taking food from home never fails to amaze me. They are spending $5 on coffee and $10-$20 a day on coffee and food! My total food cost for a day is around $5. That’s breakfast, lunch and dinner. Which is less than half the cost of a typical single takeaway serving. If you’re going out for the day, take what you need with you. You don’t need to buy things to eat when you go out, whether that’s just going to work or if you are on holidays. If you like to have coffee on your way to work, make it at home and take it with you in an insulated cup instead of buying it.
Even when Matt and I are on holidays, in Australia or Overseas we generally find a supermarket that has all of the things we need to make breakfast and lunches, because the cost of adding breakfast to our hotel booking is far more expensive than just buying things from the supermarket like cereal or toast and things to make sandwiches when we’re out sightseeing. Typically, a hotel room has a mini fridge, kettle, toaster some cups etc., so you can easily prepare breakfast in your room. Spending $20-$32 a day for a buffet breakfast and eating maybe $5 worth of food is not worth it to us. We can spend that money better somewhere else and stretch our holiday budget further.
5. Stop eating so much!
Portion sizes are getting bigger and bigger and our food costs are ever increasing to keep up with the demand of ever-growing portions. We don’t need to eat that much food, it’s bad for us physically and on our bank balances. I have lots of cookbooks to draw inspiration from when creating my meal plan and most of these books are from the 1970s and 1980s, some are my mums from when she was in high school and others that I’ve purchased from the op shop. When you look at portion sizes from back then compared to the sizes of today, we now have portion sizes that are double or triple the size. No wonder we have problems with weight, food waste and debt in our society! We are buying way more food than we need! For example, you don’t need to serve 1 whole chicken breast per person. A 125g portion of chicken breast per person is more than enough and you can usually get enough in a recipe to serve 4-6 people with 1 large or 2 small chicken breasts.
I haven’t been able to source a good poster from an Australian government website, but the American heart association has a great poster which shows the recommended nutritional guidelines for a healthy adult. I’ve listed the link below if you want to check this out. Not only have I saved money by sticking to these portion guidelines, but I’ve also lost weight and have more energy because of it.
I hope you liked this article and be sure to come back soon for more tips and tricks on how to save money!
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