Money-saving practices that will change your life

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Money-saving practices that will change your life

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Many people find saving money difficult. Whether you arrive at each payday with nothing left in your bank account, or you’re just not making the kind of savings progress you had hoped, there are some simple steps you can take that will make a big difference.

Make a personal budget

It’s impossible to make any kind of savings plan without knowing how much you’ve committed to spending each month. Formally recording your personal budget make it easy to work out what your disposable income is, and how much you can afford to put aside. It also helps to highlight areas where you might be spending more than you should. If your budget says you should have plenty left over, but you never do, it might be time to look at your discretionary spending!

Budgets are easy to set up. You can download any number of templates from Google Docs, or use an online tool like the one available from Sorted. You’ll need to enter the total amount of your income and all your fixed expenses (like accommodation, power, phone, rates, etc.), so be sure to have that information on hand. When determining how much you are able to save, try to leave yourself a realistic allowance for ad-hoc personal expenses like entertainment and clothes; a budget that is too strict will be hard to stick to.

Save power

Electricity is a major household expense and seems to cost more every year. A few minor adjustments in the way you use your appliances can result in big savings on your power bill.

  • Set your heat pump to 21 degrees instead of 26 degrees to use 50% less electricity
  • Make sure your home is well-ventilated – dry air is cheaper to heat than damp air
  • Replace your lightbulbs with LEDs to save around $100 a year
  • Cut showers from 15 minutes to five minutes to save up to $900 a year (for a family of four)
  • Turn appliances off at the wall to save over $100 a year on wasted standby power
  • Wash clothes in cold water to save up to ten times the electricity of a hot wash
  • Consider solar – a 3.5kW system could produce between 3000 to 4000 kWh of power a year, which is about a third of an average house’s power consumption
  • Check your house is properly insulated to prevent heat escaping
  • Check Powerswitch to see if you could save money by changing to a different electricity supplier

Make it yourself

Eating out, ordering in, and buying your lunch at work can all add up to hundreds of dollars a month. Buying a $5 sandwich every day for 48 weeks of the year will cost you $1200. Cooking your own meals and taking leftovers for lunch, or making your own sandwiches from supermarket ingredients will save you hundreds of dollars a year.

Change the way you drive

Canstar Blue estimates that half of New Zealand motorists spend between $100 and $250 per month on petrol. While fuel efficiency is strongly influenced by the age, make and model of car that you drive, the way you drive it can save you plenty of money at the pump.

  • Time your journey to avoid heavy traffic, because idling and driving in low gears uses more fuel
  • Reduce drag by removing roof racks when not in use, and closing the windows when driving over 50 kmph
  • Reduce the weight of your car by removing heavy items from the boot
  • Stick to the speed limit – fuel economy reduces exponentially at speeds above 90 kmph and cruising at 110 kmph will use 25% more petrol
  • Ensure your tyres are properly inflated and aligned to reduce rolling resistance
  • Get your car serviced regularly to improve engine efficiency

Quit (or cut back)

If you have a vice (and don’t we all?), then you could save big by giving it up or cutting back. Reducing wine consumption by one modestly-priced bottle a week will save $780 per year. Smoking one less packet of cigarettes a week will leave an extra $1140 in your pocket. Quitline NZ estimates that giving up smoking altogether saves approximately $8000 a year. Even giving up a 250g block of chocolate a week will save you over $250 a year.

The incremental effect of these small lifestyle adjustments has the potential to save you hundreds or even thousands of dollars a year, so why not give them a try? Happy saving!