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New Year Challenge: Save $6,000 This Year
A couple of weeks ago I was a guest on Saturday Mornings on ABC 774 here in Melbourne, talking about how to replenish savings after the annual Christmas over-spend.
My immediate answer was "stop spending". If you don't have the money, don't spend it. Put away the credit cards. Forget about Afterpay or Zip Pay or any other buy now, pay later scheme. The goal is to pay off the debt, even if that debt is to you. The money taken from savings to pay for Christmas needs to be repaid, and quickly.
So, as well as stopping all unneccessary spending, you can quite easily save over $6,000 this year just by not spending $115 a week.
I've put together a few simple things anyone can do, no matter where they live, where they work, what the size of their family is. As long as you follow the plan, and don't make excuses you'll quickly notice you're not spending nearly as much, which gives you more to save. They are small, painless changes in the way you spend your money, and they will stretch each dollar to the nth degree.
Some of them you may already do. Some of them may not apply to you. But there will be some you can use to pay your savings account back.
1. Set up a budget. The very first step is to create a budget. Write down your income and then work out ALL of your household expenses. A simple budget uses your pay period (weekly, fortnightly, monthly) to determine income and expenses. This gives you a clear view of what's coming in and what's going out. You can see where you can cut expenses.
As you list the expenses on your budget take note of how much you're spending on electricity, gas, water, insurances, internet, phone charges, food (seriously the biggest area most folk overspend in), petrol, clothes, hairdressing (another huge expense that's easily trimmed, pun intended), gifts, eating out - if you're thinking every budget category then you're thinking right.
About the only expense you won't be able to easily trim is your mortgage (but you could dedicate that $6,000 to paying it off faster).
2. Never shop without a list. And stick to it. Set up a basic shopping list (most people generally buy the same items week after week) and fill it in every week/fortnight/month before you shop. Look at ways to cut your supermarket bill - try generic brands, or multi-purpose products. This will save you at least $45 a week or $2,340 a year.
Buy in bulk and keep at least 20% more in your grocery budget.
Stick to the $300 a Month Food Challenge (and yes, it can be done - we lived on $70 a week for years, and there are five of us). There's a ton of information in the Forum and throughout the Article Archive that will help you write a shopping list, then a meal plan within your grocery budget. The rest is up to you - you either choose to stick to it and adapt, or give up.
3. Give up smoking. Not only will you save at least $280 a week (if you smoke a pack a day), but you'll save on medical and dental bills as well. Look forward to saving about $14,560 per year. That's 75% of an average mortgage payment! How much sooner would you be mortgage free if you stopped smoking? If you can't stop, try to cut down by at least a pack a week and keep at least $2,080 a year in the bank.
4. Try to have at least one meatless meal a week and cut your meat bill by at least $7 a week. Savings $364 a year. Meatless meals don't need to be complicated or beans or tofu. Toasted sandwiches, baked beans on toast, scrambled eggs or omelettes are all meatless meals.
5. Buy your meat from a wholesale butcher, or in bulk. A 60kg hindquarter costs about $600 ($10.00/kg) and should keep a family of four in meat for about 6 months. At just $100 a month for meat instead of $60 per week, and keep $1,920 a year.
6. Fix that dripping tap, and reduce showers by 3 minutes. Catch the warm-up water from showers and in the kitchen and tip it into the washing machine. You'll not only be saving a precious resource, but about $125, if not more, per year.
7. Turn off all power appliances at the wall socket. Even in standby mode, appliances are using electricity. Make sure you always turn your computer screen off when you shut down, it can really suck up power. And unplug that phone charger (save money and electricity and charge your phone in the car)! Do these things and save about $120 per year.
8. Wash in cold water. Seriously the easiest thing you'll do to save money. Flip that dial or push that button on your washing machine so it is Cold Wash, Cold Rinse. You'll save on water heating costs, and your clothes won't fade as readily. Save around $2.50 per week per family in water heating costs or $130 per year.
9. If you haven't already change all light globes to compact fluorescents (some table lamps still use the old tungstan light globes) and save about $60 per year PLUS they last 8 times longer! Or go one step further and switch to LEDs, IF you have the cash in your home maintenance budget. The difference in the power bill will be immediate.
10. Stop buying lunch! Don't roll your eyes and mutter "not this again", there are still far too many people who can't afford it, buying lunch every day, and then wondering why they can't buy groceries. At an average of $9 per day for a meal, and $3.60 for a soft drink, that's $63 a week, $3,024 a working year. And don't buy snacks and drinks on shopping trips for you or the kids and save at least $10 per week; have the girls home for coffee instead of buying that cappuccino and save another $5.60 per week ...all together save at least $3,835 per year!
Total savings of $6025!
To make sure you reach your goal, open a separate bank account and arrange to have at least $115 a week directly deposited into this account. Then sit back and watch your savings grow, without any major lifestyle changes.
My immediate answer was "stop spending". If you don't have the money, don't spend it. Put away the credit cards. Forget about Afterpay or Zip Pay or any other buy now, pay later scheme. The goal is to pay off the debt, even if that debt is to you. The money taken from savings to pay for Christmas needs to be repaid, and quickly.
So, as well as stopping all unneccessary spending, you can quite easily save over $6,000 this year just by not spending $115 a week.
I've put together a few simple things anyone can do, no matter where they live, where they work, what the size of their family is. As long as you follow the plan, and don't make excuses you'll quickly notice you're not spending nearly as much, which gives you more to save. They are small, painless changes in the way you spend your money, and they will stretch each dollar to the nth degree.
Some of them you may already do. Some of them may not apply to you. But there will be some you can use to pay your savings account back.
1. Set up a budget. The very first step is to create a budget. Write down your income and then work out ALL of your household expenses. A simple budget uses your pay period (weekly, fortnightly, monthly) to determine income and expenses. This gives you a clear view of what's coming in and what's going out. You can see where you can cut expenses.
As you list the expenses on your budget take note of how much you're spending on electricity, gas, water, insurances, internet, phone charges, food (seriously the biggest area most folk overspend in), petrol, clothes, hairdressing (another huge expense that's easily trimmed, pun intended), gifts, eating out - if you're thinking every budget category then you're thinking right.
About the only expense you won't be able to easily trim is your mortgage (but you could dedicate that $6,000 to paying it off faster).
2. Never shop without a list. And stick to it. Set up a basic shopping list (most people generally buy the same items week after week) and fill it in every week/fortnight/month before you shop. Look at ways to cut your supermarket bill - try generic brands, or multi-purpose products. This will save you at least $45 a week or $2,340 a year.
Buy in bulk and keep at least 20% more in your grocery budget.
Stick to the $300 a Month Food Challenge (and yes, it can be done - we lived on $70 a week for years, and there are five of us). There's a ton of information in the Forum and throughout the Article Archive that will help you write a shopping list, then a meal plan within your grocery budget. The rest is up to you - you either choose to stick to it and adapt, or give up.
3. Give up smoking. Not only will you save at least $280 a week (if you smoke a pack a day), but you'll save on medical and dental bills as well. Look forward to saving about $14,560 per year. That's 75% of an average mortgage payment! How much sooner would you be mortgage free if you stopped smoking? If you can't stop, try to cut down by at least a pack a week and keep at least $2,080 a year in the bank.
4. Try to have at least one meatless meal a week and cut your meat bill by at least $7 a week. Savings $364 a year. Meatless meals don't need to be complicated or beans or tofu. Toasted sandwiches, baked beans on toast, scrambled eggs or omelettes are all meatless meals.
5. Buy your meat from a wholesale butcher, or in bulk. A 60kg hindquarter costs about $600 ($10.00/kg) and should keep a family of four in meat for about 6 months. At just $100 a month for meat instead of $60 per week, and keep $1,920 a year.
6. Fix that dripping tap, and reduce showers by 3 minutes. Catch the warm-up water from showers and in the kitchen and tip it into the washing machine. You'll not only be saving a precious resource, but about $125, if not more, per year.
7. Turn off all power appliances at the wall socket. Even in standby mode, appliances are using electricity. Make sure you always turn your computer screen off when you shut down, it can really suck up power. And unplug that phone charger (save money and electricity and charge your phone in the car)! Do these things and save about $120 per year.
8. Wash in cold water. Seriously the easiest thing you'll do to save money. Flip that dial or push that button on your washing machine so it is Cold Wash, Cold Rinse. You'll save on water heating costs, and your clothes won't fade as readily. Save around $2.50 per week per family in water heating costs or $130 per year.
9. If you haven't already change all light globes to compact fluorescents (some table lamps still use the old tungstan light globes) and save about $60 per year PLUS they last 8 times longer! Or go one step further and switch to LEDs, IF you have the cash in your home maintenance budget. The difference in the power bill will be immediate.
10. Stop buying lunch! Don't roll your eyes and mutter "not this again", there are still far too many people who can't afford it, buying lunch every day, and then wondering why they can't buy groceries. At an average of $9 per day for a meal, and $3.60 for a soft drink, that's $63 a week, $3,024 a working year. And don't buy snacks and drinks on shopping trips for you or the kids and save at least $10 per week; have the girls home for coffee instead of buying that cappuccino and save another $5.60 per week ...all together save at least $3,835 per year!
Total savings of $6025!
To make sure you reach your goal, open a separate bank account and arrange to have at least $115 a week directly deposited into this account. Then sit back and watch your savings grow, without any major lifestyle changes.