10 Super simple money-saving tips

The double whammy of flat wage growth and growing living costs, particularly housing, has made saving money more difficult than ever for many.

Saving can sound like a pipe dream to all of us at the best of times. But according to Savvy’s 2020 Financial Literacy Report, 51.3 percent of respondents pay their credit card bills on time each month. A further 41.75 percent of respondents also keep track of their app expenditures.

Here are some 10 things you can do to improve your chances of saving money successfully. Not just for your short-term objectives, like a vacation, but also for long-term ones, like building a home deposit:

#1. Establish a budget

The budget is at the core of every savings strategy. Budgeting lets you prioritize your expenditure and strike a balance between spending and saving for the entire year.

By checking your credit card statements, bills, bank statements, and receipts, you can cover all of your daily expenses, such as rental or home loans, transportation, insurance, and energy.

You then subtract these costs from your income—full or part-time employment or casual work, insurance, social benefits, child support payments, savings, etc.

If you spend more than you earn, ask yourself what you should cut or cut back.

“When you figure out your money goals, think about which items you need for your basic living expenses and which are extras or stuff you could probably do without if you needed to save some money.”

It is advisable to change your budget at least once a year. Or more often, the conditions change drastically (e.g., getting or losing a job, having a baby).

If you spend more than you earn, ask yourself what you should cut or cut back.

#2. Track your expenses

We can fall into the pit of believing that spending on big stuff is what gets us into trouble when it’s the little things that end up costing more.

That’s why it’s essential to keep track of your day-to-day expenses, so you’re not living beyond your means. Your bank statement will inform you how much money is going into your bank account and how much is going out of it. Then it would be best if you compared it to your budget to see whether or not you stick to it. Then you can find the places where you can save.

Just the idea of having to keep track of our expenses will put a stop to impulse purchases.

#3. Pay on your credit card

With credit card interest rates in Australia as high as 25% or more, it’s easy to see how the quick use of a credit card will weaken even the most modest savings targets.

Paying your credit card in full (on time!) is the easiest way to reduce fees and late payment charges.

To stop your defaults, set up a direct debit transfer. And you’re expected to pay more than the minimum required, or you’ll end up paying a lot more in interest. If you can’t trust a credit card, Canstar suggests taking a leaf out of your grandparents’ book: “No credit, no EFTPOS. Only withdraw the cash you need for the week and make it last.”

It may sound counter-intuitive considering the above guidance, but one innovative way to save money is to use your credit card more.

But on one condition: this tip applies only to those who pay off their balance on time and in full every month.

Find a credit card with a stellar cash-back reward offer and redeem the rewards every few months, and then put the amount of money into a bank account that you have set aside for savings only.

#4. Open your savings account

By limiting access to your money, savings accounts can give you a higher interest rate than a simple transaction account.

Savings accounts are places where you can place some or all of your disposable income – the amount left over after you pay for personal needs and taxes – and any windfalls (e.g., tax refund). You can be tempted to spend this disposable money by setting up automatic scheduled transfers from your account to your savings account.

Rounding off your transaction account balance is a way to earn additional money for your savings account.

Round your bank account balance down every time you check it and pass it to your mortgage or savings account.

“If I signed in and my account had $119.35, I’d round it down to $100 by adding the $19.35 to my savings account (wich is debt).

Some months, this resulted in a few hundred paying off without much effort, and I didn’t miss out on those tiny numbers.

#5. Emphasis on recurrent spending

Although every little bit helps, it’s your big, ongoing expenditures that provide the most fertile ground to raise your savings, the Thrifty Issue team says.

Go over your bank statements and search at all the stuff you’ve spent your money on over the last year.

Then see how much money you can save on them, for example, by refinancing your home loan, comparing insurance companies and other services.

Spend a day working through it all, and you will save thousands.

Although every little bit helps, your high, ongoing expenses offer the most fertile ground to raise your savings.

According to Choice, shopping for a cheaper energy retailer could cut your energy bill by almost half.

Insurance premiums can run to a few thousand dollars a year, so savings of 10% may amount to hundreds of savings.

Cutting your fuel costs requires constant diligence, and a comparison calculator will tell you which gas stations have the lowest rates and the best day of the week to fill.

Even if you are satisfied with your telephone and internet service providers, ask them if they have a better package. This is information that they are not always able to give to current customers.

#6. Monitor your impulses

Credit cards, ATMs, and online shopping make it easier to invest money than ever before. Especially in things that we want rather than need, the degree to which we yield to temptation generally comes down to our willpower. Studies have shown that self-control is a little like a muscle that tires out of use.

Ironically, it is the willpower of poorer shoppers that seems to get the most drained. This is because they face repeated, challenging financial decisions.

Not that the poor have less willpower than the wealthy.

Instead, for people living in poverty, any decision – whether or not to buy soap – involves self-control and dips in their small pool of willpower.

If you see anything you want, wait at least a day before buying it – 30 days if it’s a major purchase you don’t need. You could find the emergency passes. Another way to short-circuit the drive to buy is to figure out how many hours of work the purchase price represents; you’re likely to think the item isn’t worth it.

#7. Smooth the bills

‘Bill Smoothing’ is a payment mechanism provided by service companies (electricity, gas, water) where you pay them on a quarterly or monthly basis instead of having to pay the whole bill in one go.

It saves people on tight budgets from the shock of payments and going into debt, and eventually paying interest.

Many people recommend that you take a similar approach to your day-to-day finances: squirreling money away periodically to cover big bills down the road.

‘Bill Smoothing’ is a payment mechanism provided by service companies (electricity, gas, water) where you pay them on a quarterly or monthly basis instead of having to pay the whole bill in one go.

This helps you to save money over time to pay those bills yearly versus, say, monthly – taking advantage of incentives for paying bills and insurance in one hit rather than in installments.

Add up the cumulative amount of your huge bills for the year. That way, you can figure out how much you will put off each pay in advance.

By setting this balance away every time you’re billed, you’re still going to have the money left to pay your next big bill.

#8. Plan your meals, please

Meal preparation is one of the best ways to save your money.

If you know what you’ve been eating for the week and shopped accordingly, there’s no need for spontaneous trips to the store. Extra visits will result in you spending more money and even wasting food.

It’ll be even easier for you to remain within your reach by purchasing all your necessities at low-priced stores like Aldi.

We recommend that you use the food you already have in your cupboard, pantry, garden, and freezer to save money.

If a family of four does, they won’t have to spend more than $21 on their weekly grocery stores. This is around $300 less than a household of that size normally spends. Do this one week a month, and you’ll save around $3,600 a year—the ‘$21 Challenge’ main, the menu plan, and the shopping list.

#9. Become a ‘promiscuous buyer.’

If you’re a brand loyalist – anyone who repeatedly buys a product or service – beware of that.

The chances are that the vendor in question knows that you are less price-sensitive than other prospective customers. They could take advantage of your loyalty or, worse, take you for granted by charging you non-competitive rates.

Don’t let your emotional attachment to a vendor get in the way; start looking for a better offer elsewhere.

Only the possibility of leaving will lead to a better deal from your current supplier. They can realize that keeping current customers is typically much cheaper than winning new ones.

And if, for example, they don’t give you a discount or a free upgrade, don’t despair. More than likely, there are other companies lined up to give you a successful introductory price.

Don’t let your emotional attachment to a vendor get in the way; start looking for a better offer elsewhere.

In short, you should be a ‘promiscuous user,’ says Michael Ginsburg, the founder of Spending Hacker.

It’s not about being loyal; it’s not going to get you a better offer; it’s almost likely to end up costing you more.

“Make sure you don’t have any brand loyalty and are able to move if a rival provides better value.”

#10. Stop the Mind of Poverty

Many people consider thrift – using money and other resources wisely and not wastefully – to be a virtue.

But while thrift is an obvious way to save, we need to be careful not to be too frugal.

Ultimately, the best way to get ahead financially is to concentrate on profits, saving, and spending.

Focusing on skimping on the grocery and energy bill would only get you so far and place you at risk of poverty.

Poverty, or lack of attitude, is one that is preoccupied with a lack of money: all the things the individual doesn’t have and can’t get.

These people tend to have self-limiting convictions and make choices based on fear of loss or failure. People with wealth, or surplus, mindset, on the other hand, base their decisions on the future benefits.