It’s easy to see the downsides- wet washing, lawns that are impossible to keep in check. And all people ever talk about is saving money for a rainy day.

But when that day comes, instead of spending it, how about we look at some positives for our finances?

Spend Free Day

We often think about trying to limit our spending, and one great tool is to aim to have one spend-free day a fortnight (or a month, whatever you can stretch to). This doesn’t include necessities that you’ve already paid for- electricity, groceries, your train ticket. Really, it illuminates how much we spend on non-essentials.

It’s amazing how often I’ll think I haven’t spent any money, and then remember the quick coffee I slipped in while waiting for the train or the app I bought on iTunes because I was bored. A genuinely spend-free day is no easy task, but it’s amazingly worthwhile, both as a way to break bad spending habits and to save some actual dimes. And, let’s face it, it’s easier to save money on rainy days than days when the sun is shining.

Use It

Something about sunny days makes it harder to work. If you’ve got some grey skies, instead of getting down about it, use it to your advantage so you’ve got no errands to run when the sun starts shining again. One hour on your financial records and the rest of the day can be yours. Do some of the tasks you’ve been meaning to do for months; check that your pay rate is similar to those advertised online.

Have a quick look at how your super is being invested and whether that suits your current financial goals. Set up an automatic savings deduction. Then sit back with a cup of hot chocolate and watch a movie.

Lose It

Finding it hard to wash all your clothes and keep the house tidy? Now is the perfect opportunity to go through everything you own and downsize. Rainy days are perfect for going through your wardrobe, photographing everything you want to sell on eBay and putting the rest aside for Vinnies. For every rainy day, hit up one room. Kitchen can be next, lose any appliance you don’t use regularly. If you’re really keen, you can look at doing your storage spaces. Your sunny day self will thank you for it. And we’ll save significant money if our greater awareness of what we currently own can be reflected in our spending behaviour.

Living a pared-down lifestyle is a financial boon- we’re less likely to buy unnecessary items and less likely to have to find creative ways to store everything we own. The ramifications are huge- a bit of control, and we have to buy less storage space, rent fewer storage units and don’t constantly have to worry about finding a bigger space for all our stuff. The start of which can be achieved on our rainy days!

What I soon realised is that saving money can become a game, a game which is fun to play and has an exciting outcome. My goal was to change my thought process from seeing frugality with a negative outlook to that of something that was helping me & actually making me lead a better life with more money.

Here is how you can start to become competitive with yourself and see saving money as nothing but a game.

Constantly try and beat your performance

Things like utility bills, shopping bills, weekly expenses – you name it, you should try and constantly beat it. That means you should benchmark your spending in a particular area and see whether week on week or month on month you can reduce the cost.

I do this with my electricity bill & namely my weekly grocery shop. I will use my summer electricity bill (often the largest) and aim to beat it every quarter from then on. The weekly shop I try to see how healthily I can feed myself each week for as little money as possible. Sometimes that means buying my produce from multiple stores (which lucky for me are still in the same shopping centre).

Challenge other people to stay motivated

Another great way to stay motivated with the saving money game is to compete against family and friends. Have a race on who can save $500 or similar.

Basically anything to bring up that group mentality to help achieve a goal will help.

Perhaps you could challenge your partner to see who can spend the least in a working week? Or who can take the quickest showers each day? It all adds up as they say.

If someone says it’s impossible, prove it otherwise

This is a great one. If someone tells me I won’t succeed – it immediately turns me competitive. Use other peoples negative attitudes to your advantage. If you tell someone you want to save $50,000 and they laugh at you – prove them wrong and tell them once you achieve your goal.

Reduce

We spend a lot of time considering how we might reduce our budget without spending the required time trying to reduce our lifestyle, and there are lots of potential saving opportunities in reducing what we use. Household products, like dishwashing detergent and shampoo are a good example. Cut them with a bit of water, they’ll still be effective and will last twice as long. Put a timer in the shower, and turn down the hot water thermostat. Reduce your wardrobe budget by half- you’ll find you’ll invest far greater energy in buying something you really love if you haven’t got a lot of spare money to go towards it.

Reuse

Reusing old items is an important base to reducing our purchasing, and saving money. Nowhere could this be more evident than it what we eat. If your family is anything like mine, we’re constantly throwing out vegetables that have been too long neglected or getting rid of leftovers. Be conscious of what is in your fridge. Two nights a week, make a pact that you will cook only from the ingredients in your fridge and pantry. You’ll notice your grocery bill will go down, and you’ll have a bit of spare money in your food budget, on top of which, you’ll be avoiding unnecessary wastage. I like to check every couple of days what might be getting a bit old, and make sure that I add it into dinner for that night. Get creative- throw together ingredients and see what you can create. Curries and stirfrys are a great way to use a wide variety of ingredients.

Recycle

No longer is this just about saving the planet, it’s about saving the hip pocket as well. Recycle your veggie scraps into a compost and save on unnecessary fertiliser costs. Sell anything you no longer use on eBay or at a garage sale- your house will be finally uncluttered, and you might even have a few spare bob into the bargain. Try and avoid buying disposables- cloth napkins can be washed, try and encourage the family to use handkerchiefs instead of tissues. Use old jars of jam or peanut butter to hold pens or keys, and save on spending money on equally ugly pen holders. Use old wine bottles as candle holders and old plastic bottles as gardening tools. Creativity and an interest in reducing our lifestyle to the necessities is a crucial step, not only for our environment, but also for our finances. If we can live by the three Rs, living within our means becomes one step closer.

It’s always exciting to find money you weren’t counting on. So today we figured we would look at some ideas for what you can do with this money should you be lucky enough to find some.

Note that some are a little more quirky than others.

A set and forget investment

Depending on the size of the money, perhaps any unexpected money could be put into a managed fund or batch or lower risk shares. Although I am not a big fan of either, if the money isn’t crucial to your living requirements and you weren’t expecting it anyway – this could be a good way to take a punt on long term growth of the money.

A debt killer

You could use the money to eliminate all of your debts. Or better yet, use what you can to eliminate your bad debts like credit cards and other high interest charging loans.

Definitely a wise move as you will unlikely ever get a windfall of money like this again, allowing very dollar you earn from that point on to work towards your actual goals – not your debt reduction goals.

A materialistic splurge

Some might simply want to splurge the money on some purchases. Although you will likely to have nothing to show for it into the future, some may enjoy the idea of treating themselves with this unexpected money.

Term deposit or high interest account

This of course is the more boring of the list, though safer none the less. A term deposit or high interest account could help yield more earnings from the current money. Depending on the sum of money, a term deposit paying 5% returns can be a rather attractive option.

Gambling

Perhaps you could attempt to double your money on a single hand of black jack. Definitely not a wise decision, nor one that any sane person would recommend, though could provide a good return or simply lose every dollar you have. For me, I would never go near this idea. Ever.

Though the idea of doubling your money is exciting (albeit unrealistic!).

An investment in your own idea

Perhaps you have some goals you always put off due to lack of resourcing or time. A fistful of unexpected cash may allow you to focus on your goals better. You may put the money towards a fitness goal of weight loss with a personal trainer. Or perhaps use the money to finally kick start that killer idea you never bothered with.

A karma creator

Perhaps you need some good karma. You could donate the money to a charity of your choosing. You know what they say right, every dollar you give tends to return 3x as much. It’s some kind of made up law of attraction with finances but seems to have worked for a few people based on blogs I have read.

Enter Jason Zweig, the most famous proponent of neuroeconomics with ‘Your Money, Your Brain’, and he’s got some great news. It’s not me. It’s my brain that’s letting everyone down. Here are some of the amazing things he suggests.

Out Of The Cave

Sadly, our brains didn’t evolve amongst the flashing lights of the stock exchange. We came from caves and our brains evolved to help us survive as long as possible and maintain the existence of our clan. In other words, we’re hardwired towards day-to-day survival as opposed to having a fantastic ability to plan for and envision our long-term financial security. We might struggle with our savings because our ability to envision decades ahead isn’t very well-developed. Brain Short Circuit: If all we can deal with is the day-to-day, make a couple of changes in yours that will save you money and invest it in your savings account. Or take yourself out of the equation and make it all automatic. Do not, ever, touch your emergency account unless it’s something you will still consider emergency level in 5 years time.

Swing At Every Pitch

Warren Buffett, surely a man who’s brain has evolved far beyond my own, loves to remind us that we don’t have to swing at every pitch. We don’t have to jump at every amazing investment that comes our way, every ‘sure-thing’ money making scheme. So why do we? Zweig says it’s because our brain is hardwired to action. Waiting for the right opportunity is a discipline that it might take a long time to develop. Brain Short Circuit: Understanding your own desire to make things happen now is a powerful tool. It’s like the millions of investors who change their investments every ten seconds. Put together a strategy you’re comfortable with and stick with it. Make the move when the right opportunity comes along, whatever your brain is telling you.

Seeing Red

Zweig suggests an amazing thing- amazing because it is so obvious, you can’t believe you hadn’t already thought of it. Back in the day before Internet, how often did people check their stocks? Probably around once a week, with the Saturday papers. These days, with iPhones, office jobs, emails, we could check 5 to ten times daily. And when we see red, our whole body goes into automatic defense mode. We probably don’t even recognise the stimulants coming from the brain, making us jumpy, constantly update our portfolios or panic and sell. Long-term investment has always been a key criteria for financial experts, and technology, Zweig suggests, has made it harder, not easier, to be a sound long-term investor. Brain Short Circuit: Recognise your body’s automatic panic button and stop checking the ups and downs of the stock market on an hourly basis. As Zweig says, technology is a tool, not an automatic path to great investing, and we should use it as such.

The Borrower Is Slave To The Lender

The writers of the Book Of Proverbs, working over a thousand years ago, would have a lot to say about the current state of affairs. With personal debt at record levels, and debt crises between countries set to make 2012 a tense year, the slavery of borrowing is as fresh now as it was then. So, what’s the lesson? Get out of debt, or at least bad debt. Frugality isn’t so much old-fashioned as it sensible. It’s not about massive gains, but about protecting from massive losses. Conservative, yes. But also quite appealing with the current state of affairs.

Pay Yourself First

From history, we can probably only learn one thing for certain. Everything changes. Nothing stays the same. Kingdoms that looked certain to rise forever, just as quickly fall. The sun becomes the centre of the solar system, and the earth is no longer flat. So how can that one truth affect our finances? Some experts would suggest it’s a big argument in favour for allowing at least part of your investment strategy to include paying yourself fist. Setting aside ten percent of your income every paycheck, to be invested conservatively, might not sound all that inspiring but it will cushion you from the fluctuations that history tells us are bound to happen. Whether or not things get dicier in Europe, and what affect this has on Australia, a savings strategy of at least ten percent isn’t going to let you down.

Stay Flexible

If diversification is a crucial risk-protection, the flexibility is as important. Before we all pull out our yoga mats, consider how flexible your finances currently are. If you needed $5,000, would it be calamitous? Are you over-invested in one area, without an ability to withdraw should cash-flow become a problem? Emergency fund, a mix of long and short-term investment strategies and a manageable level of debt are all powerful tools for your finances.

Everything Turns

The flip-side of constant change is that no period, no matter how dark, can last forever. It would seem that it is anyone’s guess as to what might happen over the next couple of years. The Internet abounds with comparisons to the Great Depression and, in one article, an unexpected allusion to the Dark Ages. Economies inflate and deflate, often involving hardship on a personal level. But if what goes up must come down, we can take some comfort from the fact that the reverse is also true.

The Savvy Budget

Often, when we first start earning decent paychecks, we can spend without having to think about it. Petrol in the car, a taxi ride home- none of it really adds up in our heads because we haven’t had to think about it before now. Once you’ve decided to start building up your savings, this becomes a different story. We need to know where the money is going. Without that information, our chances of making any difference to our savings is negligible. So what’s your monthly expenditure? And how much of it is essential? Answer those two questions and you’ll have a better idea of how much space you have to save.

Tight, But Not Terrible

The general idea is that your savings scheme should feel tight, but not terrible. If you’re watching your money reasonably carefully and know where it’s going, you’re probably in the right zone for saving. If you can’t go out any night of the week and stress for hours before meeting someone for a drink about your lack of spare cash, it’s time to relax the reins a bit. Saving at too high a level isn’t only an uncomfortable way to be living, it’s also not sustainable. You’ve got a better chance of saving real money once you’ve got it at a careful but not cruel ratio.

The Numbers

Generally, experts suggest you should be working towards saving 20% of your income. If you’re paying off debt, then your debt repayments can comprise part of that 20%. It’s also worth considering your super. While your employer might be making contributions, unless you’ve negotiated a better rate, it’s likely that’s at 9%. It’s worth trying to negotiate a higher rate, as well as contributing yourself, as some sources suggest a saving of 15% of your income for retirement. It’s a good idea to start at a lower level, say five to ten percent. Once you’ve become accustomed to that level of saving, gradually increase the amount until you hit twenty percent.

What Are We Saving For?

This of course varies from person to person, but once you start thinking about it, there is so much to be saving for. An emergency fund of 3-6 months wages. A house deposit, or some time overseas. Our retirement, obviously. It’s a good idea to write down your savings goals. You might want to have an emergency fund, plus a fund you can readily access for house maintenance, work opportunities, or replacing a burnt-out car. Any saving is great. But having an idea of where you want to put your money is essential to building your long-term financial stability.

After you know how much of your pay is accounted for in fixed expenses, you are left with a leftover sum of money that is called a variable expense threshold. This is the money you need to use for feeding yourself, getting yourself to work, buying lunch, buying clothes and all that jazz – or as we call it ‘living’,

Why is the variable expense threshold important?

The reason your variable expense threshold is important, is it gives you an indication of the money you have left over for everyday living. Often we don’t realise why we are getting into debt until we see this amount. The left over money is often very little to say the least.

It also helps you with one other thing – see below.

Calculate your daily spending limit

Now that you have your left over variable expense threshold – divide it by the amount of days in the fortnight or month, this will give you a daily spending limit.

This means you now know the actual figure you cannot go over on a given day. It’s often quite shocking to realise how little we have each day.

How it helps me save money

The way it helps me save money is by making me conscious of spending again. Often I don’t think twice about spending $50 on lunch, a magazine, a few drinks at work etc. Though now that I am aware I technically only have $45 a day to do not only that but buy groceries and fill up with petrol – I start to question whether I should be spending my money on that particular thing.

Great to help you become aware of your actual budget again. Give it a go!

Your Everyday Life

The article suggests buying things for the life we live everyday, as opposed to the life we lead once in a while. It’s not a bad way to look at the way we spend a lot of our time, and our money. We wear cheap clothes that can run into rags quickly for our nine to five jobs, which we attend 5 days a week, and then invest a serious amount of money in a dress we might wear a couple of times a year. The other stunning example is my running shoes. Like the author of the MSN article, I would wear them most days and give them a pretty good workout. They’re falling to pieces, but I seem to spend the money instead on a pretty pair of heels. Ironically, we would probably have a much better chance of living the lifestyle we desire (whether it’s more international trips, an investment property or a chance to do up your own home) by investing in our current lives and making wiser financial decisions.

Your Health

Amazing how I spend a chunk of money on a nice bottle of wine and some cheese, but scrimp and save over vegetables. Which, in the long-run, is a better investment? It’s a no-brainer. Of course, luxury is great. Having some of it in our lives is important. But not at the expense of necessities. Wealth isn’t necessarily about what we have or how much status our objects give us- financial freedom goes far deeper than that and can be achieved by abandoning competition with the Jones’ and living our own lives to their utmost. Imagine missing the dentist because of the cost, but still heading out for a nice dinner which costs around the same.

Life-Rich

Another big example is people buying a house that ‘everyone can stay in’. Meaning a house big enough to accommodate the family at Christmas or being able to have everyone to stay over for a big birthday celebration. It’s a lovely thought, but chances are you’ll be paying the mortgage on a house too big for you most times during the year. Your house should suit you. If you’ve got house guests every weekend, then a spare room is logical. If not, buy a house that is the right size for you- you’ll have greater opportunities in terms of location or saving a greater percentage of the cost of purchase. Appreciating the life we live now is a great thing, for both our wellbeing and our wallets.

Swap Lists

An ingenious idea I can’t get over from Bina Brown at the Herald. Swap your shopping list with a friend- there’s no way to impulse buy if you’re following someone else’s list and the difference will be incredible. Not only will you be saving money by avoiding impulse purchases, you’ll also have to have greater awareness of what is needed in your house. It will force you to deal meal plans for the rest of the week, another great savings measure.

Swap Jobs

Can’t seem to find the time to do the gardening? Prefer to do anything rather than fix the screen door? People have different pet hates, and instead of contracting them out, why not swap them out? If you love cooking, why not organise to make a couple of meals for a friend while she babysits your kids?

Swap Houses

A couple came into my work recently. They were from Bateman’s Bay and had signed up on a house swap website. They had seen all different parts of the state, and were currently spending a week in a lovely house in Blackheath. It doesn’t have to be official- you can just do it with your friends- or you can join an online network. You’ll save significant money on accommodation and food expenses, and get to new locations from an insider’s point of view.

Clothes Swap

A quick google will reveal the myriad opportunities to engage in clothes-swapping in your local area. A wonderful, sustainable means of refreshing your wardrobe and reducing it of unnecessary extras is to donate them to a clothes swap, and pick up something new in return. The clothes are vetted on arrival, so quality is guaranteed.

Swap Ideas

If the past two years of writing for Savings Guide has taught me anything- and it’s taught me many things, this primarily- it is that there is an incredible, often untapped resource out there to help us achieve our financial goals. The words of experts are incredibly important, but the personal anecdotes of many people who have become debt-free, saved for their first home, gotten an education are equally important as motivation. If you’ve got great tips, share them. Comment, discuss, argue. For all the downsides of the Internet, it is a wonderful thing to have a vast community (and a fair bit of knowledge) readily accessible.