We all want to save money, it’s almost a given. I don’t think anyone out there gets a kick out of wasting money, so that naturally means we are born savers I guess you could say.
The problem is however that by the time we physically say the words ‘I need to save money’ – it’s normally because we are in a reactive position of over spending and in turn facing the realisation we have stuffed up.
The real trick to saving money is not finding a burst of inspiration to quickly get organised and reactively fix all of your financial mishaps. Instead it is to maintain motivation, maintain discipline.
Incremental steps to save money
The overused analogy of ‘slow and steady wins the race’ really rings true in this instance. The best way to save money is to not try and deposit huge lump sums into your savings account, nor completely go without a product (e.g. giving up food for the month, as one gleeful reader once told me). Instead it is about finding a way to be smart with your money, not in just one area such as food – but in many.
This might mean taking a little bit of extra time to find the best deal. For instance you could either take the first insurance quote you get or you could look to beat it with a competitor.
Can you find a way to hunt down a cheaper deal? The answer is yes. All you need to do is become skilled at bargain hunting on the internet and have the motivation to not purchase something on the spot but instead go hunting for a cheaper option.
You can apply this logic anything. Stop, slow down and try and shave a few dollars off every purchase you make. A can of deodorant at the supermarket, next to it is another brand on special that day – why not buy it and try it? Your high interest bank account is no longer that ‘high’ – grab your money, vote with your feet and find a better savings rate.
The real question to ask yourself in order to save money
Asking yourself the question “is this the best option for my financial situation?” before a purchase or any kind of outlay will make you question your motives. Through asking yourself to reaffirm your purchase motives, you may just realise the money could be better spent elsewhere. Better yet, you could even save the money instead.
You want to save money, but ask yourself why?
Well depending on your personality, you are either looking to save money because you hate the idea of wasting it (and in turn, wasting your work time) or you are trying to save for something particular, a holiday for instance. For most people it is actually a combination of both.
So what exactly are you saving for? This is your chance to set some very clear and actionable goals. Motivating yourself to save money rests heavily on having an end goal in sight – something to assure you that your motivation and discipline will eventually lead to a reward.
This doesn’t mean that once you get to your reward you should stop saving. Instead look to incrementally save money towards your goal and celebrate the day you reach it. Go on your holiday, enjoy it – but when you come back, start up your discipline again and continue your routine.
Don’t have a goal to save towards?
Don’t worry. Many people don’t either. They simply save money because it is the ‘done thing’ or a piece of advice passed onto them from their parents.
The best thing to remember is that although saving money may feel slightly pointless (e.g. putting away cash into your high interest account without any goals in place) – one day it won’t feel so pointless. You may establish a new goal or achievement you wish to work towards and when that day comes – you will already have money saved and a routine in place that pushes you to save money constantly.
How I save money
Below are some tiny inspirational ideas on how to save money. I want to show you how basic ideas, when implemented in full force with other ideas to save money – can quickly add up.
I spend only a set amount each week day
I figure out what I earn per day after tax, I then set myself a certain percentage of that, say $20, to spend per week day. This means each working day of the week, my disposable cash is always limited to a set budget and I am pocketing far more than I am spending.
Tip: some people withdraw five $20 notes and put them in five separate envelopes, each marked with a day of the week. This means they grab an envelope before leaving the house each day and in turn know they are limited to that exact amount only.
When I had a credit card, I left it at home
I can happily say I am not in any credit card debt these days, though in the past I used to leave my card at home to avoid any impulse purchase temptations. Knowing you have a line of credit that can be used whenever can be exceptionally dangerous.
I attempt to bring my own food 2-3 times per week
I really hate people telling you to take your lunch to work as their golden saving money tip. Thanks genius, I know already!
For me however the motivation to save money came from having my set daily budget (as mentioned above of $20). I was amazed at how quickly that $20 would disappear, in fact these days it doesn’t even suffice anymore for a small lunch.
I set myself a personal goal of trying to see how much of the $20 daily allowance I could have left over and at the end of the week I would tally how much money I had not spent.
Some weeks I had only a few dollars, other weeks when I took my own food I would get rather close to barely spending $5 per day. The trick is to alternate your weeks, some weeks you should spend your full budget, others you try to save it. Any residual money left over should be put into your savings account for a week you actually need it.
I reduced my entertainment expenses
Things like going to JB Hi Fi and buying movies, music or other little gadgets. Many readers of Savings Guide have told me they cannot walk past a retail store such as JB without making a purchase.
These sorts of entertainment expenses make you feel good temporarily, though you quickly lose the sensation once you watch the movie and it spends the rest of eternity on your shelf.
As movies and other entertainment expenses have got cheaper, it seems all too easy to buy a movie that we ‘think’ we may like. If you cannot cut out these kinds of expenses completely, at least stop purchasing things you ‘think’ are meant to be good. Instead, hire them or rent them either online or at the video shop (do these even exist anymore?).
I got energy smart
No more lights on when no one was home. No more using the dryer for every single piece of clothing I needed to dry.
I acted like I was going green and started to look for ways to make my household energy efficient and in turn money efficient. I love the idea of reducing unnecessary expenses that would otherwise hinder your ability to save money.
Tip: check your heating, cooling, appliance energy ratings, fridge seals, natural use of sunlight and breezes amongst other things – these types of things are quick wins for saving money.
Set yourself a daily goal to save money in a new way
Why not aim to find one new way, per day, to save money?
Without doing a shameless plug, why not come to Savings Guide each day to find a new way to save money? There are literally thousands of ways you could better your finances, it’s just a matter of getting inspired and hunting down a few tips you can easily implement.
Imagine the accumulated savings you would make if you did this over 365 days in a year?
What you need to remember
To keep it simple, save money by maintaining motivation and maintain discipline. Avoid quick fixes and reactive tips and focus on making smart money decisions every step of the way.
This is why the Savings Guide motto is:
It’s not how much you earn; it’s how smart you are with what you have.
Now go save some money!