Overcoming Savers Block; the inability to save money due to lack of ideas or overwhelming to-do lists
Sometimes, we try our very best to save money but simply begin to get stuck. I like to call this ‘Savers Block’, similar to how great writers get ‘writers block’ – savers too can become a little unmotivated and not sure of what to do next to keep going forward money wise.
This guide is for you. It’s for the savers out there that do a fantastic job of saving money already. They budget well, they live within their means and they begin to thrive off the adrenaline of finding ways to save.
If you feel you have no other methods to save money, here is what you can do. I will explain a framework of thinking to help you break the ‘savers block curse’ along with provide some actionable ideas.
The key is to focus on ‘doing’ not ‘planning’
Writers often get stuck because they are full of ideas; so many ideas in fact that they can barely put pen to paper to write a full story on but one of their ideas.
Saving money is exactly the same, I often overwhelm myself with ideas, schemes and ways to save money to the point that eventually, I am crippled with to-do lists that simply see everything as too hard.
The key is to simply start doing things. This means you need to:
- Stop writing lists
- Focus on achievable targets (more on this below) and;
- Simply do
Simply do? This means get cracking. Do something. Make some progress. Achieve something. Deposit a dollar into your holiday fund, contribute extra to your super, say no to your next $3.50 coffee and save the money instead, spend 30 minutes on the phone to your existing insurers to get a better price or cancel.
If you get moving and do something, you will break the curse of savers block which will begin the process of motivating you to become the elite saver you once were. It’s all about simply doing something.
Focus on achievable targets and don’t start a new one until it’s done
Stop writing your to-do lists and focus on actually completing some achievable money saving targets. The time it takes to write a list could be better used in actioning a plan.
If you need some motivation, use this framework to choose three things you want to achieve today (or at least begin the process for some items) and only start doing something else once these three tasks are done.
- A big task to save money
- A medium sized task to save money
- A small sized task to save money
A big task could be finding a better deal on your home loan rate, car insurance or perhaps reducing the interest you pay on a credit card via a balance transfer deal. These are things that may take a few days or weeks to complete but will create BIG savings.
- Once you complete this task, only then can you take on another ‘big task’.
A medium sized task might be something like finding 1-2 monthly expenses to cull. For example, sitting down and evaluating your budget and opting to boost your cash flow by cancelling Foxtel or something that isn’t vital.
- Once you complete this task, only then can you take on another ‘medium task’.
A small task might be something you do everyday that adds up over the long term. Perhaps you could start eating breakfast at work using the companies milk, make your own coffee each morning instead of buying it, shower for 45 seconds not 5 minutes, start saving coins in a jar and banking them towards your debt each Friday at lunch.
- Once you complete this task, only then can you take on another ‘small task’.
The trick is to break things down into small and manageable tasks that will save you money. You then action that item with the notion that you cannot do anything new until that item is complete. This will reduce your feelings of anxiety and inability to progress by methodically working through problems, solving them and in turn saving money as a result.
An example of how I used this framework to save money
My big task to save: getting a new home loan
I decided to refinance my home loan from 5.3% to 4.51% (comparison rate). This means my interest rate would reduce by 0.79%. I have calculated that by refinancing my home loan, I will be saving $350 per month.
This task took me nearly 2 months of backwards and forwards, scanning ID documents, completing applications and more. Now that it is done however, I have a spare $350 per month.
That is $4,200 a year of cash flow that now belongs to me, not the bank. I intend to use this money to grow my savings, grow my holding of shares and generally find a few ways to stock pile some cash to help me feel more comfortable about my long term position.
My medium sized task to save: selecting three expenses to reduce permanently
I decided to cull three of my monthly expenses by shopping for a better deal or simply looking to discuss ways with my providers to reduce the costs slightly.
By looking at my budget spreadsheet I was able to quickly see three large expenses that I could target. Health insurance, home and contents insurance and my wifes mobile costs.
My BUPA health insurance
I used my lunch break to visit BUPA (health insurance) and requested a copy of my full features and benefits. I was able to get the assistant to point out what extras I had and their associated costs. As a result I was able to identify that by having full dental cover, I was paying an extra $70 per month or $840 a year. I opted to cancel and use the savings to boost my mortgage offset account.
My AAMI home and contents insurance
I rang AAMI and asked why my insurance had gone up 25% year on year as it was something I was dumbfounded by but never actually followed up on. Give my years of loyalty the answer I received didn’t really make a whole lot of sense so I decided to shop around elsewhere and within 30 minutes I found a cheaper provider that actually offered better protection. I cancelled AAMI and moved my home and contents to Budget Direct.
I now save $20 per month or $240 a year. The extra money is going straight into my wifes account to help improve cash flow for incidental purchases.
My wifes mobile bill
My wife had previously purchased an expensive iPhone 5 prior to going on maternity leave and since becoming a stay at home mum. The costs of the phone plan were more so geared around her previous job and her high call volumes. Now days she makes less calls and uses less data. On top of this she is paying a fee for the iPhone itself that equates to a mobile plan of $79 per month.
We looked at the data and call usage and found that a $29 plan from a rival network would actually be better suited. We have one more month on the contract before we can switch and begin saving $50 per month; a cheeky $600 a year in savings by simply reducing a phone contract!
My small sized task to save: minor deposits into my offset account
Now that I have a new home loan, I also have a 100% offset account that helps me pay less interest on my outstanding mortgage balance.
I often check my bank balance on the way to work; so have decided that my small money saving task to get ahead will be to round down my daily account balance and deposit the small difference into my offset account to reduce interest payable.
This means I am depositing very small sums such as $2.48 into my mortgage account whenever I notice an uneven number.
Don’t do anything new until you complete the task
The goal here is to not start anything new until you find a small, medium and large task and simply action it. Get it out of your mind and off your mental to-do list by simply doing.
Much like how people state that ‘Rome wasn’t built in a day’; neither were wealthy and successful individuals. It takes patience, diligence and the ability to do things methodically to get ahead.
You want to simply achieve this three pronged framework to beating savers block each and every month.
After a full year, you will have completed:
- 12 big money saving tasks
- 12 mid sized tasks that will save you money
- 12 mini tasks that are providing ongoing savings
Imagine how much money could be saved against all of these tasks?
Here are some of the ideas that popped into my head while writing this article. It has me pretty excited to start actioning some achievable targets and I am over the moon at the feelings of achievement I have started to feel.
I could sell my house, buy a cheaper one save the profit and pocket the monthly interest savings to fund my investments and savings accounts.
I could sell my $35,000 4WD and buy a $20,000 second hand 4WD of similar quality. I would then save $200 a month for the next 6 years ($14,000+!!!)
I could look to properly compare health funds to see if my premium can be substantially lowered with a new provider.
I could set a small task for myself to pay just $50 less a week on my groceries. That would be over $2,600 a year at minimum and I could try and beat the $50 by $1 a week.
I could find new ways to make micro deposits into my offset account. With every cent I add, I pay less interest. If I pay less interest, my budgeted repayment per month becomes less; this in turn creates more money to deposit and the downward spiral of mortgage repayment begins!
I could store all of my monthly direct debit expenses in my offset account and have them debited directly. This means I would have an extra few thousand dollars a month helping reduce interest again.
I could set a small task to automate all of my bills so that I never ever have to use my valuable time to do a mundane task like paying a bill manually. Time is money!