We all like to save money, but sometimes the doing is a lot more difficult than the saying. Put your money where your mouth is with these five mini money tricks and start saving today.
1. Set up an automated savings plan
Sometimes the most difficult part of saving is seeing your bank balance and thinking you can’t go without the full amount. Try setting up an automatic transfer of 10 per cent (or thereabouts) of your weekly (or fortnightly) income to be taken out of your main account and placed into your savings account as soon as it is deposited. You’re less likely to miss it if you don’t see it, but you’ll have the welcome feeling of knowing that you still do have a little bit put aside for security.
2. Create an automated budget
If you struggle to create your own budget, why not enlist the help of one of the many free online services or apps that can help you manage your money more effectively? Some apps can set up a budget for you, then, by allowing them to link your bank accounts, can track your spending and help you with saving. Read our articles for further information on some of the more popular budgeting apps and online services.
3. Pay off debt ASAP
The best way to reduce your debt is to,as quickly as possible,pay off any money you owe. Paying interest on a credit card or loan is simply dead money – money that would be better off in your pocket.
According to lifehack.org, there are two very effective methods for paying off debt. The first is called the debt snowball. This is where you list all your debts from smallest to largest and, once your monthly expenses are covered, you pay off the smallest debt balance first, before moving on to the next, and so forth.
The second method is known as the debt avalanche. This is when you pay off your debts by highest to lowest interest rate instead of balance. So, the debt that charges you the highest interest rate is paid off first, then the second highest, and so on.
Either way is effective, but the small victories of paying off small debts may be a good way to get you on the path to becoming debt free. And besides, nothing is stopping you from playing around with both methods to see which one best works for you.
4. Scrutinise your expenses
Write down your daily, weekly, fortnightly and monthly expenses. Then put them all under intense scrutiny. Can you get by without a Paypal account? Can you borrow library books instead of buying them? Do you need that subscription to The Australian?
Chances are, there are a lot of expenses you can cut. So write down your expenses and track them for a month. Note whether they are a necessity or a luxury, or something in between. Cut out the ones that aren’t necessary then find ways in which you can save on the ones that can’t be ignored.
5. Stall for 30 days before you buy
If you’ve made up your mind to buy a big-ticket item, wait an extra 30 days before actually purchasing that item. This way you’ll know whether you really need it, and careful consideration and deliberation will prevail over emotionally driven impulse spending. And if your heart is truly set on it, you’ll have the chance to really shop around and get the best possible price, saving you even more money. But you may also find that, after 30 days, the novelty has worn off and you’ll still have that money in your pocket, ready for a rainy day.
Sounds simple right? Whether it’s a little bit of action on your part, or trusting automated services, if you stick to these easy saving tips you’ll be surprise at how much money you can save.