Save, save, SAVE! Most of us were taught the importance of saving at a very young age however, everyday we are bombarded with advertising telling us to spend, spend, SPEND! Consider these 8 tips below that can show you how to save more effectively.
1. Record Your Expenses
Recording your expenses is the first step to saving money as it will enable you to determine how much you're spending. Aim to keep track of ALL your expenses for an entire month.
There's a few effective ways that you can record your spending. 1) You can download an app such as Pocketbook to help you record your purchases each day. Some banking apps may also provide spend tracking features. 2) You could write down your daily expenses and categorize them. 3) If most of your transactions are done via credit card or Eftpos, you could access your bank statement for the last month to analyse your spending habits.
2. Create an Effective Budget
Once you've determined how much you're spending each month, you can then record your expenses into a workable budget. Your budget will compare your income to your expenses to determine if you're over spending.
Make sure to factor in expenses that may not occur every month such as car servicing, registration and electricity bills. Get our FREE Budget Planner.
3. Factor Saving Into Your Budget
Try to save at least 10% of your income if possible. Create a savings category within your budget. If your expenses are too high and you can't save that much, it might be time to cut back in some areas.
You might have some non-essentials or subscriptions that you could do without. Although it may be hard to save at first, once it's a part of your budget, it will become easier.
4. Create a Savings Goal
By having a savings goal in place, you will have even more reason to save. Start by thinking what you'd like to save towards. Here's a few savings goal suggestions:
- A deposit for your first home
- Your dream holiday
- An emergency fund - at least 3 months of living expenses
- Your child's education
5. Review Your Spending Regularly
With your budget plan and goals in place, you want to make sure you stick to them. It's important to review your spending regularly. If you find yourself tapping into your savings, you may be over spending. You may at times experience unavoidable set backs, just focus on getting back on track as soon as possible.
6. Set Up Multiple Accounts
Most banks will allow you to set up multiple banking accounts. For example, you might consider setting up additional accounts so you can manage your savings, bills and everyday spending separately.
You may also want to have an account for less frequent bills such as car registration and servicing. Speak to your Bank or Financial Advisor to determine what's best for you.
7. Make Saving Automatic
Most banks will offer automated transfers between your accounts. You can choose how often and how much you want to transfer into your savings account. This is a very smart way to save as you won't even have to think about it. This can reduce the temptation to spend the money instead.
8. Watch Your Savings Grow
Check your savings progress monthly. This will help you stick to your savings plans and see how well you're doing. If you feel you can afford to save more, it might be a good time to review your budget.
These are just a few easy ways to save money. The most important part, is to give it your best shot. Our FREE Budget Planner will help you to see where your money is going and keep track of your spending.