Small savings can steadily grow without sacrificing the fun things in life. Get creative, set a goal and uncover easy ways to save in the long run.
Like rolling out of bed to exercise first thing in the morning, sometimes the hardest thing about saving money is getting started. Once you’re in full swing, however, and can see how your actions are having immediate positive results, you’ll forget about how hard it was to take that initial action and perhaps even discover more easy ways to save.
The first hurdle is setting your mind to saving; the second is realising that every small step counts. You don’t need to have hundreds of dollars to start to put money away – in fact, most savings accounts can be opened with as little as $1. Similarly, you don’t need to deposit huge chunks of cash into this bank account; small savings can accumulate fast if left untouched, and may make a big difference in the long run.
First, change your spending mindset
When you exercise, there are tangible gains from your actions. Think of saving money in the same way. When your savings plan is full of sacrifices, you’re less likely to stick to it in the long term. But when you can see the benefits, and still get to reward yourself with life’s little luxuries, you’ll want to forge ahead to reach your financial goals.
Set savings goals
What are you saving for? Write down a couple of short-term and long-term savings goals. In the former category, you might list a new outfit or tickets to a concert. In the latter, perhaps a car deposit or overseas holiday.
Make sure your short-term goals are enjoyable, and things you really want. Also make sure these expenses are big enough that you have to save for them. This way, when you reach your goal, you’ll get a little psychological boost, which will reinforce your good habits. Not sure how to set up a goal? My AMP goal tracker may help.
Make saving automatic
You might consider setting up a savings account, like the AMP Saver Account, that is separate from your everyday bank account, and make regular, automated transfers into it. Savings will likely accumulate more when you don’t have to think about moving money around. As a bonus, most savings accounts have higher interest rates than transaction accounts, so you’ll be rewarded and earn interest for letting your cash grow.
Make small cutbacks
You’re probably well aware of some of the simple ways you can save money just by:
- spending less on everyday items: write a shopping list and meal plan before visiting the grocery store
- pack your own lunch rather than buying a sandwich
- order one less glass of wine at Friday night work drinks
- make coffee at home instead of grabbing a takeaway
- and if you drive to work, leave 15 minutes earlier to miss traffic and be more fuel efficient by not idling in jams.
You might also consider:
- cancelling memberships and subscriptions you don’t use and swapping them for free entertainment
- giving yourself a cooling-off period when making big purchases, to avoid buyer’s remorse
- turning off the TV – you’ll avoid ads that drop spending temptations under your nose and will save on your electricity bill to boot.
These trimming techniques mean you’re not denying yourself anything major, but are making small steps toward growing your savings. After a while it will become second nature and you won’t even notice you’re doing it.
Review your necessary expenses
“I love paying bills,” said no one ever. Let’s face it – shelling out for electricity, gas and water is not enjoyable. But it is fun to find ways you can pay a little less on your bills.
An easy way to save today is to talk to your utility providers about a better plan, or look at switching providers to one that can offer you a better deal to help you reach your savings goals. They will also be able to provide suggestions on how to save to money on a tight budget by, say, using services at off-peak times.
If you have a huge mobile phone bill, you can save each month by switching to a cheaper pre-paid plan and relying on wi-fi rather than paying for data. Then try bill smoothing as a way to ‘set and forget’ about making these payments.
If you’re putting your bills or even your grocery shopping on credit cards, be sure to pay them off in full every month to avoid high interest rates. Your credit score will also thank you.
Earn a little extra income
Looking for ways to save on a tight budget? Most of us have unwanted electronics, unworn clothes or unused pieces of furniture that we don’t need. There are plenty of ways to sell this ‘stuff’, whether that’s through an old-school garage sale or, to save time, an eBay listing. You’ll make some extra cash on the side, and de-clutter your life in the process.
Remember to review your savings plan
Try to review your savings plan regularly. When you see results as your savings begin to grow, you’ll want to stick to your saving strategies. You might even want to set bigger financial goals and look for more easy ways to save for the future.
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