Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.
If you have ever been in a situation where you need to seriously tighten the belt then you have probably done/or will do a lot of reading on how to achieve this. In my experience doing a lot of research can be helpful and can teach you some great tricks but ultimately without action, you will most likely save very little. In order to save money, you have to stop spending money! Sounds super simple but can be quite hard to implement, especially if you have been living this way for a long time.
It can be done though! Here I will list my number one GO TO tips for the times my family have had to seriously curb our spending. KEEPERS it’s time to start saving your money!
UNDERSTAND THAT YOUR SMALL CHANGE IS JUST AS IMPORTANT AS YOUR BIG NOTES.
They all add up, including small change. Have you heard the saying ‘count the pennies and the notes will look after themselves’, well people! It’s true! So my first tip starts here – look at your bank account for the last three months and put your spending into these categories.
Fixed – All expenses that are non negotiable each month. Things like Home Loan repayments, Insurances or Utility Bills.
Essential – These expenses are essential but can vary. For example – doctor bills, vet bills, petrol/gas or transportation costs.
Variable – Everything else!
For a stationary nut like me I enjoyed highlighting each item to the applicable colour but however you do it at the end make sure you tally up each category per month. It is quite revealing to see where all your money is going. Don’t get depressed once you see it! It’s quite normal for people to freak out when their expenditure doesn’t quite match up to their income! Scary! This is why you are taking action though right?
Once you have had your minor panic attack, it’s time to fight back! It’s time to take a good hard look at your needs vs wants. Where can you cut back? Can you take your lunch to work every day and eat healthier at the same time, or ride share with someone who goes in the same direction as you, or just pull your big girl socks up and force yourself to stop buying new things! It’s just for a season and the sacrifice will be worth it.
COMPARTMENTALISE YOUR SPENDING
What I mean here is allocate a certain amount each month/week to your three areas FIXED, ESSENTIAL and VARIABLE. Anything left over at the end of the month/week goes straight on the home loan or in a hard to access saving account. THEN DON’T TOUCH IT!!!!
The most important category you will need to watch is the VARIABLE one. This is where people end up accidentally spending more than they should. I encourage you to take out your weekly/monthly allowance which includes petrol, coffees, take away, clothes, gifts and random purchases and then don’t touch your account again unless its to pay a bill. If you spend the cash too soon then you have to wait until your next week/month or get creative and have a garage sale or sell something online. Be strong!
BUY SECOND HAND
With all the online apps that are around that allow you to swap/sell/buy it’s worth hunting around for the things you need. You can pick up some serious bargains online if you are patient and shop around – TRUST ME! I used to go shopping at my local Westfield more than once a week and come home with bags of new items. I would get a rush from a serious shopping spree and when I has to start watching my expenditure I went through a grieving process because it had become such a hobby and source of enjoyment for me. I still enjoy shopping and now I am thrilled when I find a really great bargain. Same passion – different approach. I get great children’s clothes, shoes and even furniture online from other parents/sellers, shop at Charity second hand stores for cheap toys/clothes and Garage Sales when I have the time. It’s a lot of fun and you meet a lot of great people at the same time.
LOWER YOUR BILLS
This is not a quick fix because it takes time to research but it is worth looking at what Insurances you have (or don’t have), utility suppliers, phone/internet providers, child care fees, sporting memberships etc. Reassess ALL of them and make some cuts. To the services you don’t want to cut try and shave some expense off the top or change provider that will offer more discount/rewards.
MAKE SOME LIFESTYLE CHANGES
Can you walk/run outside instead of at a gym? Or train with buddies at an oval nearby and buy a treadmill for home, this could save you $900 or more a year in gym memberships.
Install energy efficient lightbulbs, adjust your thermostat, only use cold water in the washing machine, during winter close your doors and curtains to only heat the rooms you need heated, compare phone plans, assess which subscriptions you can get rid of for a season.
These are all small changes that may only save you $20-$100 per month each but when added all up together you might end up saving $400 a month. Especially if you significantly reduce your food/grocery bills and takeout options and instead meet people for a drink instead of a meal, take food to work and just live more simply for a season.
It’s important to remember it will only be a season for you, even if it’s a long one! It will end eventually and you will be so proud of yourself for sticking to it!
Thanks for reading! Don’t forget to subscribe so you can stay in touch with any new posts. Until next time Keepers!
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