Living on a Budget, Frugal living, Savings Year, Debt Reduction Year, No/Low Spend or whatever name you want to give to time spent living within particular cash constraints (because you're not using your credit card are you!) does not have to involve drastic changes. Just a few simple everyday alterations to habits can go a long way to removing debt and start to build savings.
Remember too ~ a savings plan does not mean hoard your money and never use it. I believe savings should have a goal or target amount ~ starting with an 'available when required' emergency fund of around three months income or $3000 (whichever is the greater). Savings should also have a purpose - be it a house deposit, a holiday fund, enough to get landscaping done or a water-tank installed.
Bob Proctor, business man, life coach, author of six minutes to success, says: "Always remember, money is a servant; you are the master. Be very careful not to reverse that equation, because many people of high intelligence have already done so, to their great detriment. Unfortunately, many of these poor souls loved money and used people, which violated one of the most basic laws governing true financial success. You should always love people and use money, rather than the reverse!!"
Here are 12 changes you can make today to get your savings under way and start living a frugal life without taking the frugal life too far over the 'tight-arse' line.
1. Eliminate Daily 'Luxuries'
Stop buying sandwiches from the deli, bring food from home and enjoy lunch in the park; Borrow books from the library instead of buying magazines; Read the news online rather than grabbing the paper to read on the train ~ all those 'normal' daily habits which seem inconsequential as small individual purchases add up - costing you a fortune and not even be factored in your budget. There is nothing wrong with the occasional treat of lunch out, and we all should be able to treat ourselves every so often, but regular daily expenditures you can easily cut down without a dramatic impact on your life. Instead of buying a coffee every morning ($4 per cup = $20 per week), make it at home and save $1,000 annually on coffee.
2. Prevent Repair Costs
There should be no need to avoid spending on maintenance - without regular maintenance on equipment, home and personal health, the repair work may ultimately cost more. Keep up to date with your oil changes, water, plugs and tyre rotations on a regular basis to prevent expensive car breakdowns. Regular maintenance and repairs around your house; regular check ups at the doctor and the dentist; Cleaning out the filters of whitegoods will help reduce costly repairs creeping up on you.
3. Share Kids' Stuff
4. Shop on a Full Stomach
Shopping on an empty stomach encourages over spending - and usually on foods grabbed on a whim. Hunger makes you vulnerable and you end up purchasing what you crave at that moment, usually these some costly ready-to-eat snack full of empty calories, sugar and enhancers. With media reports of people being charged with stealing for eating while in the supermarket - eat a sandwich at home while writing your shopping list (after you've done your menu plan, of course *grins*). It's also better on the budget to shop generically as much as possible. $1.99 vs $4.89 for a kilo of wholemeal flour is a big difference in price. For those 'label' critics - decant your 'no-names' into a storage container and 'brand snobs' cant convince you the products are inferior. When you catch yourself initially choosing the premium brand and changing to the generic choice, consider adding the difference to your savings.
5. Buy in Bulk
Buying in bulk is usually a great cost saving technique, more so now with unit pricing on shelf tickets. This is especially true for cleaning and daily use items such as paper towels, detergent, or bleach. Wait until they are on sale and buy enough to last you until the next sale rolls around. Try to ensure you buy things that can be stored for a long time without running the risk of waste due to expiry. Consider buying bulk items with friends or family ~ 20kg of rice is considerably cheaper per kilo than single packet buys, but many shoppers won't get through that amount within safe times or have room for appropriate storage. Dividing 20kg between 2-4 shoppers means you all get the necessary amount at a great price.
6. Turn off the Lights, Stand-by and Electric Blanket
Turn off your lights, shut the doors, put on a jumper, use a woollen blanket and minimalise the amount of appliances you have on stand-by just for convenience will provide an amazing impact on power usage. The same goes for water and other utilities. By changing your habits, reducing water and energy bills can be accomplished with ease. Depending on where you live might also allow options between several service providers and bundling services can result in discounts as high as 12%. Use websites that can help you find the best rates such as Energy Watch. A few hours of research and a couple of phone calls will save you money - hundreds, if not thousands - over the course a year.
7. Purchase Used Items
Sure, there are some items you would not purchase secondhand. But there are so many things one is better off buying used than new. Garage sales can often be a great money saver, especially if you haggle reasonable so both you (the buyer) and the seller feel its a good deal. Other items one can purchase used are home appliances, furniture and gardening tools. If the freezer is priced at $500 and you get $100 off, or find a second hand one for $200 ~ put the difference into your savings account (or put at least $100 into the bank). Cars are a depreciating asset, so buying a used car is usually much better savings value than a new one. Try to have someone who 'knows' cars available to come shopping with you, or at least give you a run down on what you should be looking for and when its best to walk away from a 'bargain'.
8. Reduce Reoccurring Costs
Cut down on your internet, phone, credit card interest and other reoccuring costs by ringing around. Cancel your PayTV and magazine subscriptions and put the monthly/annual expense into an online savings account. You're already paying that $50 each month to "FoxStarNet" ~ pay it to your savings instead. And go play outside with the kids, walk the dog or potter in the garden. Small incremental amounts can end up taking a large chunk of your income. Review your internet and phone bills and start shopping for better plans using my pre-prepared script - it really works.
9. Save Your Spare Change
Set up a piggy bank or money box and start saving your spare change. You would not believe how much you can accumalte by saving small amounts of change throughout the year. This is a great way to add spending money to a holiday, upgrading to Gold Class for a romantic movie date or an unnecessary but truly desired item of choice. Prior to our wedding, Husband and I would empty all the coins from our wallets at the end of the week for 'restaurant' dinners while on our honeymoon. We expected to be able to eat out perhaps three or four times during our 10-day holiday. We ended up being able to eat out most nights and take a Great Barrier Reef cruise with a diving adventure. It all adds up if you stick to routine.
10. Go Out ~ at Home
If you are planning on a Saturday night out and hitting the clubs, consider having a few pre-pub drinks at home before catching public transport into town. Instead of going out to a restaurant with friends each week, take it in turns dining in - where everyone brings or contributes to a course. If you have small children, set up a baby sitting network with friends in similar situations so you can each get the opportunity to see a movie, have a 'special' date night or romantic walk along the beach without kids in-tow and the expense of a sitter service. Just make sure you all repay the favour and it is possible to have 3-4 kid free excursions each year. Ensure you have a designated driver, taxi money or be home before public transport stops running if you do plan to imbibe *be responsible with alcohol people*.
11. Start Bargaining and Haggling
Start bargaining and put every cent you get discounted into your savings account! Although you may not be able to bargain at Coles or Woolworths, you can do it at the local market, in the BBQ or whitegoods store, with your home and/or mobile phone provider, and many other purchases. Just ask! Actually, if truth be known - you can haggle with the big stoopermarkets. I do ~ often ~ noting the sales staff with the price gun in their hand and
not so discretely stalk follow them through meat, dairy and other departments. Recently I even found meat on the shelf dated one day before use by and asked the meat manager to come and mark it down for me. Which she did. Almost by half. The meat went into the freezer and $7 went into the savings account. Actually, for us those "$7" go on to the VISA or Line of Credit at the moment, but you get the idea.
12. Do It Yourself
If you broke it you should be able to fix it ~ don't make calling 'someone' to get you out of a bind in the first instance. Fixing your broken items yourself can be a cost effective, so give it a go first. You can do your tax yourself and pay your 'accountancy fee' into your savings account - that can be $200 in the bank every July. With "my friend" Google and some amazing videos on YouTube you can virtually find the instructions for any job you need to do. Of course, be careful and make sure you have the right tools and skills for the job. Don't play with the electrical stuff or other work which needs to be done by a licensed tradesperson ~ and remember to get a few quotes and put the difference between the highest and the chosen quote into your savings.
I know this is not a debt reduction post ~ its about saving and creating some good habits, ones which are achievable and can be shared or taught to your children, siblings or parents. However paying off debt can never hurt. Often the goal of frugal living is to become financially independent. What better way to achieve that than by extinguishing debt.
Below are some posts of old which might also be helpful to those wanting to save, get ideas which really do work or discover other ways to reduce debt. So please, read back and refresh your memory if you've been following for a while or enjoy the opportunity to see how far we've come with so little.
Savings Ideas Which Make Cents
Two Challenge Takers...
Changing Habits is Saving Money
Chat tomorrow ~ ideally with some action shots on our garden capers!