A penny saved is a penny earned, but for many Australians this is easier said than done. Last week, we saw how setting up a personal budget, putting money away regularly and opening a high-interest account can help you save more. Here are three more tricks you can incorporate into everyday habits to boost your funds.
Goal setting is an important part of saving. After all, you're more inclined to save if you're working towards something, be it a holiday, home or car. Both short and long-term goals can not only motivate you to save more, but also help you achieve the things you want in life.
Short-term goals can include things like paying off your credit card debt, holidaying or buying a car, all of which should be achieved in the next few years. Long-term goals, says ASIC's MoneySmart website, should be achieved in five years or more and can include buying a house, saving for retirement or paying for your children's education.
If one large goal is too daunting, consider breaking it down into smaller milestones on a quarterly or monthly basis. For instance, if your short-term goal is to save for a holiday, set smaller goals to deposit a set amount of money into a savings-specific account each month or quarter, or cut back on unnecessary expenses (see below).
You can save more in the long run if you start paying off your debts now. Directing extra money towards paying down your debt balances can hurt now, but can take a load off your shoulders in the long term because you'll be paying less in interest and putting more money in the bank rather than paying money to the bank.
By reducing how much you spend on unnecessary items, you'll find that every little bit adds up to quite a lot at the end of the year. This can include:
- Buying less groceries - take a shopping list to avoid buying non-essentials such as junk food
- Reducing your energy usage - switch off all lights and electrical appliances when not in use, use energy-efficient light bulbs and use less water
- Give up the small expenses - cut down on alcohol, coffee, eating out, entertainment and gym memberships
- Use cash - Leave your credit card at home and only take out enough cash for the day's minimum expenses