The word “thrifty” is rarely thought of in a positive sense but that’s not fair because if we continually spend more than we earn, our debts will eventually catch up and other words such as “default” or “bankrupt” might become more familiar.
Being thrifty doesn’t mean doing without – quite the opposite. Here are six simple tips to build up your savings.
Before you can get your spending under control you need to know exactly how your income compares to your expenses. There is a multitude of smartphone apps that can help you to record everything you spend. You might be amazed to see where your cash is actually going. Be sure to check out what our partners at Create and Protect Financial Planning had to say in their article on 5 Free Apps That Will Save You The Most Money In 2018.
Make a list of your debts and organise them in order of annual interest rate. Those with the highest rates (most likely your credit cards) should be paid off first, especially as the debt is not tax-deductible. It rarely makes financial sense to invest money to receive 5%pa while you are paying credit card interest of 20%pa – or more.
Like all things, mortgage products change – particularly with interest rates at record lows. If you are more than five years into your mortgage, it could be time for a review. We’ve helped our clients save thousands of dollars, simply by looking at their mortgage structure and finding the best deal between the 30+ lenders we have access to. You might be astonished at the deals you might be qualified for.
Have you looked deep into your kitchen pantry lately? At least once a week gather up the household and get creative. Brainstorm how to use some of the existing ingredients from your pantry and fridge (those that are still edible!) in new and different ways. This creative exercise will not only be fun but will save on your grocery bills. Speaking of groceries, you should consider preparing your meals in advance, for example on a Sunday, then your work lunch prepared for the following work-week. Saving up to $40 a week from making your own meals instead of eating takeaway lunch or dinner every day can help you save another $2000 a year!
When was the last time you compared costs on your home/health/car insurance, phone plans, gas and electricity? By shopping around and negotiating a better deal you could save significant dollars on your monthly spend. There are helpful websites to make comparison shopping much easier but be aware that they only list providers who have paid to be promoted on their sites.
Most people are amazed at how many gifts they buy each year, often at the last minute. By establishing a gift list and allocating a set budget for each recipient well ahead of time, you can progressively buy gifts on sale during the year. This will certainly help your cash flow and circumvent overspending by avoiding that last minute rush.
As you watch your bank balance increase, enjoy the feeling of being in control and knowing you can have whatever you want with just a little discipline. If you require any assistance with reducing your debt and reach your savings goals quicker, call us at 1300 707 955 to inquire about our free, no-obligation consultation that will allow us to look understand your situation and long-term objectives, and then suggest ways that you can potentially make you better off in the long term.