Thursday, 20 June 2013

Money Saver Ideas.

Today lets examine some very basic money saving ideas.  Try these simple techniques and you WILL see your savings grow. 

1.  Give Up Bad Habits.

We all have bad habits, the problem is many of these are very enjoyable and therefore can be difficult to curb. If you have a BAD habit that has you reaching into your pocket on a regular basis then take WHAT EVER STEPS YOU NEED to get it under control / quit.  For me it was the old choofers,  giving up smoking saved me $140 every week and I felt so much better for doing so.  Make sure you redirect the saved income back off other debts or bills.  It's easy just to enjoy the monetary savings from giving up a bad habit, but if you redirect that money off other debt then you will be back in the black much sooner.  If you would rather you could split the savings, direct debit half of it every pay period into a term deposit savings account, the rest pay off any debt you may have.  You will need to decide what habits need culling, as yours are probably different to mine, but doing so will save you money, time, and free you from another worldly restraint.

2.  The Piggy Bank.

Get yourself a good piggy bank, or secure coin tin.  Something that is not so easy to get into.  Religiously make sure that when ever you get a coin, 50 cents and above,  it goes straight into the money tin.  When it is full use the savings to pay off debt or bills.  You could also do this for home improvements that will save you money.  I saved my coins for three years and had more than enough to install a solar power system on our roof, this in turn saved us considerable money off our electricity bill.  Win Win... Don't be tempted to bust into the tin early, set yourself a time period for which you will wait before you use the money, remember the more you save the bigger the project you can embark upon.  Solar power cost us around $8000 to install and it was all paid for using pocket change.

3.  Direct Debit - Money You Don't See You Can't Spend.

Direct debit whenever you can.  Most bills these days can be paid via direct debit, so why not take advantage of that fact.  It will save you time and petrol, not to mention it can all be done from home.  If you direct debit money as soon as it graces your bank account then you never get a chance to spend it, this can help to prevent impulse buys and in the long run will save you money.  If you don't like getting a big power or phone bill then direct debit funds every pay period into your account so when you do get a bill it is mostly paid for already.  This helps us considerably and means we don't ever have to find the full amount for these sorts of bills.  Doing this also means you avoid ATM fees, don't forget every little bit helps.

4.  Build Your Savings Account.

Go into your bank and open a term deposit account, or a similar account that makes it more difficult to access your money.  Set up a direct debit into this account.  Ten percent of your wage should be direct deposited into this account.  Set the withdrawal to occur the same day you are paid so there is less chance you will spend it.  If ten percent is a little high, then make it 5 percent.  Anything is better than nothing and over time you will begin to save money.  As your financial situation alleviates redirect more money into your savings.  If you stick to this regime it is one of the most efficient ways to ensure you begin to accumulate some cash.

5.  Reduce Your Debt.

Debt is one of the biggest issues we face as minimalists, therefore eliminating it should be a top priority.  Everyone's debt level will be different, as will be the institutions to which you owe money.  It is very hard to eliminate all debt but you have to do whatever needs to be done to get rid of it.  I can't begin to explain how important this goal should be in your long term plan, or short term plan if your debt is not so high.  The feeling of freedom when you are debt free is simply amazing.  It is magical to know that your hard earned dollars are not getting chewed up by credit cards, hire purchase, personal loans and the like, and in most cases all we manage to do is pay off the interest not the capital.  Sometimes, in the short term, this will mean working more or even a second job.  Doing that however should be a temporary arrangement, minimalism is about freeing your time not tying more of it up.  However, the unfortunate necessities of life mean that you may have to make this short term sacrifice for long term gain, this one was the hardest point for me to personally overcome.  I had in excess of $80K in credit card / personal loan debt and I didn't want to spend the rest of my life working to pay it off.  For a period of 12 months I worked two jobs, I sold everything excess to my needs (personal items) and I constantly looked for new ways to save some money.  I even did some online paid surveys and eBay became my best friend while selling off things I decided I didn't need.  This process, although very difficult, turned out to be a real blessing as it helped me declutter therefore achieving two goals at the same time.  In a way it was very cathartic, the more I cleared my personal rubbish the more free I started to feel.  Unfortunately, for some, your debt will simply be too big to achieve this in the short term, this is where you will need to seek professional advice.  Many companies in Australia offer government regulated debt agreements, this means you can consolidate any unsecured debt into one repayment.  The flip side is that you probably won't be able to have a credit card after you have paid off what you owe.  If, after you get debt free, you still need to have a credit card get a Visa debit card or similar.  They work the same as a credit card however you top them up with your own cash and you can only spend what you put onto the card.  This provides all the benefits of a credit card minus the ability to run it into the red.  Click the article links below to view some great suggestions on how to begin this process.

6.  Live Below Your Means.

Try and live below your means a little, this really helps when those unexpected bills happen.  For us it seems like a daily event that something will break or need replacing, if you live a little below your means it is easier to assimilate these costs without significant impact on your life.  Don't put things on credit, be happy with what you have and live a modest existence.

7.  Shopping Online.

There are now so many cyber space based retailers that offer goods at substantially reduced costs.  These companies sell at bargain prices because they are basically a closed warehouse and do not operate as a walk in retail outlet.  This means they keep their overheads very low and require much less staff to run their business.  Establishments like this also frequently offer discontinued lines or factory seconds.  We recently purchased 100 tins of pet food (super coat - a good brand) for eighty nine cents a tin, they retail at Woolies for around $3.50 a tin....No brainer.  At risk of sounding disingenuous, as I have previously mentioned limiting too much online activity, I want to thoroughly recommend this form of shopping as it saves our family many dollars every year.  Most online retailers offer Paypal as a payment option, this adds security and traceability but may also require a credit card.

8.  Coupons, Frequent Shopper and Flyer cards, Any Type of Voucher.

Look for these whenever you can, you can save up to 15 cents per litre off fuel, better in your pocket than theirs.  If you eat out on occasion look for supermarket docket two for one deals at your local eatery.  Always use shopper cards where possible, I prefer Woolworths as they send you cash vouchers that you can use at the checkout.





9.  Re-evaluate EVERYTHING.

Most of us have outgoing expenses for home insurance, health, life insurance, income protection and so on.  These industries are becoming more and more competitive and will often equal or better a competitors quote.  Re-evaluate all your out going expenses to firstly see if they are necessary and secondly to see if you can get a better price from a competitor.  Recently I saved $60 per month on my life insurance simply by submitting my current policy to an online middle man.  They pointed me in the direction of a better provider and wham, for five minutes work I saved $720 every year.  Redirect any such savings into debt repayment or term deposit savings.  Cut things like cable TV and Internet usage.  Make sure you are not paying for an Internet plan with 50GB download when you are only using 10GB, downsize where possible don't up size.  Basically anytime we get a bill we have a look at how we can make savings on that bill, be it changing a provider or simply being more efficient around the home.  Let your bills become the trigger point to begin a process of investigating a cheaper/better way to do things, analyse each individual bill and see if savings can be made somewhere.  An example is your power bill, can you run electrical appliances (like cloths dryers) at night when the tariff is lower.  Phone bills are another, call your provider and ask if a plan can be tailored based on your current usage data, or maybe you could change to a cheaper provider.  Most of the bills we have can be reduced if you sit down and analyse them.

10.  Watch Power Consumption.

Turn appliances off at the power point to avoid vampire power leakage.  Switch off lights and only use electric heating (excluding heat pump type systems) while you are in the room.  Don't have half hour showers, close curtains at night, hack and slash where you can but always remember to first considers others in the home.  Every little bit helps, my Grandmother when she was alive told me that if I look after the pennies the pounds will take care of them selves.  In conclusion I would like to recommend you have a look at the links in this post and put your thinking cap on, take steps today toward being financially free and begin living life.

~~ Brett Tulk ~~

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