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.
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.
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.
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.
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.
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!