There is no ‘one size fits all’ game plan for someone wanting to save money. In fact, I personally believe that the reason so many people fail in their plans to start saving money is due to the concept of thinking that ‘if it works for others, it must work for me’.
This isn’t to say that other peoples saving money tips are not relevant. They can act as inspiration and a solid bouncing board for those looking to find ideas on how to save. However, it doesn’t change the fact that you, and you only, are responsible for your money and finding ways to improve it.
With this in mind, I want to share with you the top 10 tried, tested and best ways to save money. While these tips may not fit your situation completely, they will give you some solid ideas for how to cut out significant chunks of spending and pocket some serious coin.
Also, because we are a wild bunch here at Savings Guide™ – we are doing a reverse count down. Yeehaa!
10. Stop relying on your credit card(s)
I so often hear from people that are completely crippled by their credit card debt. They know they shouldn’t be using their credit card, however they continue to swipe away out of habit and quite often, laziness.
What do I mean by laziness? Well, they continue to tell themselves that their credit card is useful and without it they would be stuck. The truth is, they haven’t sat down like you are right now and read about ways to save money and get back on top of their finances – in turn making them continue to believe the lie of credit.
Perhaps they should read about the 5 credit card tips I wish I had of learnt sooner or better yet, consolidate your debts (or completely repay them) so you can finally cancel your credit card.
Quite simply; credit cards are convenient, though they often cost you more in interest than the convenience is worth, in turn hindering your ability to save money.
9. Make a point to shop around on big ticket expenses
Think about the biggest ticket items you pay for each fortnight, month or year. For me it is things like my mortgage, my car repayments, my insurance (health, life, home, car) and a range of other incidentals.
After 12 months, I can easily say that the majority of my income will go to these six items above.
So the best way to save money on these items is to shop around, compare my current providers and always ensure that I can hand on heart agree that I am getting value for my money. The moment I become complacent and simply renew an insurance policy after 12 months, is the moment I will be caught off guard and end up paying more money than I have to.
For example, it’s common knowledge that many insurance providers will increase premiums, year on year for existing customers while new customers continue to get a more attractive discount.
Case study on why you should always shop around
One of our amazing newsletter subscribers, Jennifer Nolan explains in further detail with a first-hand story;
“My home contents insurance renewal forms arrived in the post from my existing insurer – I was shocked to see it had gone up from $540 to $630 (and increase of $90 or 16.6% according to the percentage calculator).
I gave my existing provider a chance to explain themselves; they blamed inflation and an increase in crime in our area but offered a reduction to $580. Out of curiosity, I obtained an online quote from them again to double check, and was quoted $450! It seems that certain insurance companies like to sc**w their current customers in favour of new ones.
Switching to a new provider ended up saving me $297, a huge difference! I will be looking around for a better deal every year from now on.”
What does this all mean? Shop around on items such as CTP green slips, mortgage interest rates and insurance premiums (whether it be car, home, health, life, whatever). These items cost you more money than any other expense a year so find ways to save money on them by shopping around.
8. Reduce your spending immediately – it’s like getting an instant pay rise
Sometimes we focus on ways to get discounts in order to save money. Other times we need to simply remember that to have more money, we simply need to spend less money.
This is why reducing your spending is the key to saving money quickly. A reduction in spending can take shape in a number of ways, though often it’s about the small things that add up.
We spoke about this previously, though over spending falls into two distinct categories – paying too much for things we need and paying for things we don’t need at all.
Cooking at home instead of eating out, taking your lunch every day, not buying coffee at work, using food from your pantry instead of doing a weekly grocery shop – these are just some of the ways to reduce spending quickly.
They are actionable, easy and will put real money back into your wallet.
To find further ideas on ways to reduce spending, read our original post here entitled ‘how to stop spending’.
Note: Also, if you have a little bit of a ‘spending hangover’ from all your purchases, why not consider trying to offload the things you don’t need – simply aim to completely declutter your house with some of these tips.
7. Stop buying brand names – especially when it comes to supermarkets
“The greatest trick the devil ever pulled, was convincing the world he didn’t exist” – a very cool quote from the movie ‘The Usual Suspects’ that I am unable to really find a way to tie it back to what I am trying to say.
Though what I think I am trying to say, is that brand names are a farce. They convince us that they are somehow a better quality, though really they are just the same as the no-name brands.
In turn, always opt to buy the cheaper brand. For staples like toilet paper and cleaning products, this is especially the case as previously discussed here.
Bleach can only be bleach, it can’t be any better than another bleach.
6. Create a budget to finally learn how much you earn VS how much you spend
You would be surprised how many expenses we have that we never really thought about ‘as a whole’. It wasn’t until I saw all of my direct debits together that I fainted, hit the floor and quickly proceeded to cancel the non-important items.
Things add up over time (multiple mobile contracts, broadband, home phones, Foxtel and more) – be sure to evaluate what you really need these items for and cancel the ones you don’t – it’s an easy way to save money.
5. Stop drinking alcohol
Alcohol is expensive. Especially at pubs, bars and clubs. Let me put it another way; if you buy a case of beer, each beer will cost you around $1.60 to drink at home. If you buy the same beer in the CBD after work, it’s nearly $10 for the same drink.
That is 525% more expensive. Stop or at least slow your drinking if you are looking for ways to save money.
4. View debt interest that you don’t pay as money saved
Paying extra towards your debt means you pay less interest. Stop viewing your savings and debt as separate entities. Every dollar you put on your debt means you save an often high percentage of interest that would have otherwise been charged.
Always pay extra to your debts, it may not feel like you are saving money in the short term – but over the longer term, it will help you save substantial amounts of money.
Consider overpaying your mortgage, rounding your repayments on credit cards upwards or even storing some of your savings inside your loan to reduce the interest. Interest saved means money saved.
3. Stop paying for convenience
Stop paying ATM fees because you couldn’t be bothered finding your actual banks ATM. Stop paying for soft drinks, milk and bread at ultra-high prices because you opted to stop at 7/11 on the way home instead of a supermarket.
Slow down, take an extra 5 minutes to do things properly and immediately start saving money. Convenience shopping exploits what is known as ‘situational price gouging‘ in that you are in a rush, in turn meaning the providers can charge you more and get away with it.
2. Stop complaining about utility bills and fix the problem at the source to save money
We complain about rising electricity costs, rising utility bills and home energy consumption – though did we ever stop to consider that perhaps our usage of these utilities could be better improved?
You would be surprised at how much it will cost to run lighting in a house where people forget to turn lights off or unsparingly use the clothes dryer instead of a washing line on a sunny day.
Read our concise guide on how to use less energy at home and stop paying bills you don’t have to.
1. The best way to save money? Remain pro-active
If you are reading this final tip, it means that you are one of the few people who genuinely want to save money. You have read well over 1500 words on the best ways to save money because you are very much determined to save money.
Always continue to self-educate on money, read personal finance blogs, money books and learn from experiences (both your own and others).
If you haven’t already, sign up the Savings Guide newsletter and regularly search for ways to reduce your expenses, save more and get ahead. Remember, it’s not how big your salary is – it’s how smart you are with it.
Tell us some other ways to save money
Drop a comment below with your two bobs. We want to hear how you save money and what you think should have made our top 10 list.