Today I wanted to look at some practical ways to save money that everyone should be doing. Sometimes it’s not just about saving money by hunting down the best deal; it’s about making smart decisions and having wise and frugal outlooks on all that we do.
Saving money is about freeing up cash flow; it’s the leftover cash flow that excites me. Here I wanted to put forward some ideas that are practical in nature and should be able to help you free up some moolah to boost your savings.
8. Cutting your spending is more valuable than increasing your income
A big income would be nice, but a small income with smart spending can be just as good, if not better. I like to think of it like this; every time you reduce your spending or cull outgoing costs, you have a double benefit arise in that you have more money leftover and the ability to use that money to generate more money.
Once you know exactly how much money you really need, you can really start to plan your time better. As an example, you could work less and travel more if you took a job that simply covered your basic lifestyle expenses rather than chasing heavy and long term dreams that keep you slaved to a desk.
7. Challenge everything that costs you money (every single expense)
You have between now and retirement to make money. After that, the money stops coming in regularly and you rely on your savings, superannuation and any investment returns your money makes.
So start questioning and challenging your expenses, daily costs and things that cost money. Challenge yourself to find a better deal, to find creative ways not to spend the money and more. Every dollar is sacred so stop acting like a dollar here and there isn’t going to add up over the long term.
Remember, a journey starts but with one step!
6. Buy used products instead of new
You need to stop paying a premium for new products; start enjoying the second hand market and the abundance of products that OTHERS have wasted money on. Whether it be a car, TV, piece of furniture or household appliance, buying used products or second hand items is an incredibly easy way to avoid high margin retail rip offs.
By default we assume that if a washing machine breaks, it’s off to the store we go to buy a new one. In fact, the phrase ‘new one’ is so entrenched in our vernacular that it now symbolizes buying ‘brand new’ and not just a ‘different’ item. What’s stopping you from shopping around and checking out eBay, GumTree or other classifieds to find a near new version of what you need?
For example: I recently found the exact same car I purchased brand new, on the market with 15,000KM on the dial for $11,000 less than the retail price I paid just 6 months earlier. Saying I felt stupid was an understatement; the KM’s were low and $11,000 is a hell of a lot of money that I now don’t have to invest elsewhere.
Imagine if you went second hand on all of these items; washing machines, dryers, bedroom furniture, computer chairs, tables, outdoor furniture, cars, bikes, electronics and more. The amount of money saved would be staggering for all of us.
5. Maintain your personal goods properly to extend their life
Taking pride in the items we own is essential. Pride means taking the time to maintain, service and properly look after things that we have spent money on.
If you buy a house and fail to maintain it, it will fall down. If you buy a pair of shoes and simply wear them without regular cleaning and upkeep, they will fall apart.
If you apply this money saving principle to everything you own; how much wastage would you avoid? How much money would you save?
Take time out of your week to simply clean, maintain and properly love the belongings that have cost you money. It will help make the items last longer, in turn saving money while disengaging with the materialist lifestyle.
Often we need to replace goods around the house quite simply because we are failing to properly maintain them so a little tender love and care can go a long way.
4. Cancel repeating subscriptions as it guarantees you that your money will go down
Items like Foxtel, magazine subscriptions and access to games, apps and TV shows are costing Australian’s billions.
As a rule of thumb, the first place you should always look to cull in order to save money is repeating subscriptions. Items that take a regular debit from your account on a monthly or yearly basis should be your focus. We quite often find ourselves loaded up on materialistic items or services that seem important when we have lots of money, but definitely are not important when we are trying to save money.
Often you can find cheaper alternatives (such as Hulu instead of Foxtel and tethering your mobile phone instead of paying for extra internet services as a few examples).
3. Eat clean, save mean: stop letting food ruin your budget from all angles
We talk about eating at home to save money frequently, though have you considered that eating and drinking at home also has considerable health benefits? When you eat at a restaurant for breakfast, lunch or dinner when out and about, you have zero control in how the food is prepared, cooked or treated prior to eating. Even the healthiest of lunches can be cooked in incredibly bad saturated fats and oils.
Save money by eating dinner before you go out with friends, having pre-drinks at home before a night out and especially ensure that your regular breakfasts and lunches are prepared at home. If you can’t get motivated by how much you will save per day, think about how much you will save per year (cost x 5 days a week x 48 weeks in a year = total).
2. Implement a waiting period system before purchases to delay the temptation
Implement a system where by you always refrain from making a materialist purchase until you have waited at least one hour. For instance, if you are about to make a purchase; put the item down and wait 60 minutes.
It may mean you need to come back tomorrow or quite simply miss out; though if you become obsessive compulsive about the 1 hour rule, your spending will drop dramatically (as your money saving goes up!).
1. Save money by always asking for a discount
I have friends that are severely embarrassed to ask for discounts or simply attempt to barter with sales staff. What my friends don’t realize is that sales staff see asking for a discount as completely normal. It’s part and parcel with their role and is actually expected.
Why don’t you make a promise with yourself. Next big ticket item you buy for over $50, ask for a discount.
For the advanced user, why don’t you ring existing providers and threaten to leave unless they give you a better deal. The hit list would include mobile phone, home phone, internet, gas, electricity and other providers.