Real "tried and tested" methods for cutting your monthly expenses
Trying to save money can be like going on a diet: if you make drastic, sweeping changes, you may not stick with it for very long because you’ll feel deprived. So, we’ve compiled some proven pain-free strategies to help you trim your monthly expense list and boost your bank balance by up to $1,000 a month.
Yes, if you skip your morning latte on the way to work you could save around $800 a year – but unless you take that $3 every day and pop it into a piggy bank, it’s unlikely that you’ll see the savings.
Instead, you’ll probably absorb the spare change into your day-to-day spending and your bank balance will be none the wiser. Plus, you’ll have a little less spring in your step without your morning caffeine fix!
If you want some real advice that saves you real dollars, consider the following:
1. Audit your insurance policies
Grab your current insurance policies (health, car, life and home and contents) and start comparing, as a little shopping around can save hundreds of dollars per month. Premiums change annually based partly on how many claims your insurer paid out the previous year, so prices can vary significantly between providers. Keep in mind that you don’t need to wait until an insurance policy is up for renewal to change.
Monthly saving: $200
2. Tangle the temptation to spend
Savings Tip: Try saving 10% of your income each month to ensure you have enough money available to pay for future unplanned expenses
It’s always a good idea to manage your money with at least two different banks, credit unions or building societies. That way, you have one account for spending and paying bills (this is the account that your salary is deposited into), and a savings account at a different bank that can’t be accessed via an ATM. This helps to keep your savings and spendings separate, both mentally and physically, as it will take 24-48 hours to transfer funds when you’re tempted to dip into your reserves for a frivolous purchase.
Monthly saving: $250
3. Review your bills
There are plenty of providers out there chomping at the bit for your business, so dedicate a couple of hours towards completing a total budget review. Start with utilities such as electricity, phone and internet and make sure you’re getting a good deal: often by bundling these services, you can get a discount.
Monthly saving: $150
4. Turf it on eBay
One man’s trash is another man’s treasure. It’s a cheesy cliché, but it rings true! Do a quick sweep of your wardrobe, shoes, books, CDs, DVD collection, toy box, games cupboard or jewelry box for any goods you no longer like, need or use. Not only will you create a pile of goodies to sell, but you’ll also rediscover things you forgot you had, which helps stave off the temptation to shop! It’s a double win.
You may also want to consider getting rid of old furniture that clutters your spare room or shed. Anything that is in new or new condition is a great candidate for eBay profits, with some items – particularly jewelry, designer brands and good condition kids toys – fetching almost as much as you originally paid. Try listing a dozen items a month and you’ll be able to pad your monthly bank balance by a couple of hundred dollars, after fees.
Monthly saving: $200
5. Consolidate your debts
If you have a bunch of different credit card debts, personal loans and car loans, it makes sense to consolidate all of your loans and outstanding credit balances into one single monthly payment. A great way to minimise your credit card debts is to apply for a new card with a low-rate promotional offer, and then transfer your existing balances.
For instance, if you a Visa balance of $2,100, and MasterCard balance of $2,000 and another Visa balance of $2,650, your total credit card debt is $6,750. You’ll be paying around $115 per month in interest alone. By transferring all three balances to a new card with a low rate of 4.9%, you’ll slash your interest payments to just $27 a month, allowing you to pay more money off the principal than the interest. Just make sure you immediately close your old accounts, so you don’t rack up new debts on your previous credit cards.
Monthly saving: $80-$250
So you’re saving yourself $1,000 per month – now what?
A great tip for anyone that has a credit card balance or any loans, is to put that money straight in to repaying your debt! Reducing your debt and closing down accounts will help you manage your financial situation. With an extra $1,000 pumped in to debt repayment you’ll be debt free in no time!