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Start the new year with these saving tips!
If getting started has been a challenge, read on for some pain-free strategies that could help you free up some cash for your new car new home or that big annual holiday —because every bit you can save and invest for your future is money well spent.
*Skip One $20 Purchase a Week
Think about how quickly a twenty can exit your wallet: Your daily cups of coffee, that after-work happy hour every week can all easily add up to $20 or more—and fast. Eliminating these types of small expenses probably won’t require a major change to your lifestyle—but
that $80 a month you’re putting into your savings account could have a big impact.
*Slash a Big Monthly Spending Category by 10%
If you want to go a step further, ferret out a budget category that you feel could use a trim and try to shave just 10% from it. Maybe that means cutting a few work lunches a month from your food budget, or skipping a few movies to trim your entertainment costs.
*Try a Financial ‘Fast’ Once a Quarter
If you’re the type who likes to challenge yourself, consider taking a week once every three months or so to live as frugally as possible; then transfer what you saved over a typical week into your retirement account.
*Make Cash King for a Week
Try not using your plastic for a period of time—even if just a week—and see if you end up spending less than you would if you used credit. If you do, consider making this a weekly ritual. Skeptical? You’ll actually spend less as you watch the cash flow away.
*Redirect Old Debt Payments
If you’ve recently finished paying off a car, a credit card, a student loan or a personal loan, congratulations! That’s a big accomplishment. But before you start doing your happy “I now have more spending money!” dance, think about diverting that old payment amount into your savings account.
“Framing is a concept that captures how we behave differently based on how a situation is presented to us. In this case, a saver is framing their income as lower than it truly is by matching a reduction in expenses with an increase in savings." This strategy only works due to mindlessness. We often associate mindlessness with negative financial behaviors, but in this case, we’re using it to our advantage. If we were truly mindful about every paycheck we receive, this self-deception wouldn’t work.
So in a nutshell, spend mindfully but save mindlessly—it just might help you get a jump start on that nest egg. Contact us at loans@financeandmortgage.com.au to get started with the right advice.
