"With the holidays nearing, it can be very tempting you spend more money and loosen up your budget. Make sure you pay attention to your finances and finish the year strong!" - Ben Crow, Chief Operating Officer
In the face of rising living costs, high levels of debt and mortgage stress, there’s no doubt many of us find it difficult to save money. But even if you’re on an average income, there are small changes you can make that will have a big financial impact on you.
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Here are the 9 easy changes you can make that can save you thousands of dollars each year:
1. Build an emergency fund
This can make all the difference.
Have at least $500 in an emergency fund (in cash, in an offset account, a deposit or savings account) and you won’t have to go into credit card debt when unexpected financial problems crop up.
But only use this for emergencies – not for that sudden urge to spend.
2. Write and keep a budget
The first step to spending less and saving more is to know exactly where all of your money goes each month.
Really – the easiest way to cut your costs is to know where you are spending your money.
Having a written budget and tracking your expenses to ensure that it’s accurate is half the budgetary battle.
A budget is not just about what you spent in the past– your budget should be a plan of how much you spend each month.
3. Review your insurances, utility bills, subscriptions and memberships
Cancel any non-essential services and check on better deals available on the ones you keep.
The cost of a comprehensive car insurance policy can vary by over one thousand dollars per annum.
Health insurance is another great place to make savings.
And review your electricity gas providers, being on the wrong plan could be costing you.
There are comparison sites that will help you find a plan that suits and save you heaps.
4. Review your mobile phone plan
There are hundreds of different phone plans out there.
Sure it’s complicated to work through them, but it could save you hundreds of dollars a year.
5. Pay your bills on time – avoid late fees and grab a discount
Paying your bills on time is a great way to keep your credit record clean.
If you struggle with your bills, consider setting up a regular repayment amount to even out the cashflow.
Some energy providers will also offer a discount to customers who pay on time.
6. Pay your credit card and personal debts as quickly as possible to minimise interest
Pay off the debt with the highest interest rate first, then move on to the next one.
With credit-card interest rates in Australia as high as 25 per cent, it’s easy to see how the impulsive use of a credit card can undermine your savings goals.
Paying your credit card in full and on time is the best way to avoid interest charges and late-payment fees.
7. Check how much interest you are paying on your credit card
If you owe money on your credit card, check what interest rate you are paying.
Credit card interest rates can vary from less than 10% to more than 22%.
Maybe it’s worth swapping credit card providers.
But remember the limit on your credit card is not your money – it’s the banks – and if you use it you’ll be paying them for the privilege.
8. Don’t fall into the credit card points trap
Pay off your credit card in full each month.
The rewards programs are aimed at making you spend more but the points you get are not free and only valuable if you’re not falling into debt or paying interest.
Rewards credit cards usually have higher interest rates and annual fees.
Consider switching to a lower rate card with no annual fee and you could easily save $250 a year.
9. Ask your bank for a lower mortgage interest rate
Speak to your bank or a mortgage broker and ask what’s possible.
If you have a home loan of $500,000 at an interest rate of 4.5 per cent, you’ll pay $412,034 in interest over 30 years.
Reduce it by 0.25% and you’ll save $26,452 over the life of the loan.
That’s almost $1,000 a year.
And you’ll be surprised how often they see yes to an interest rate reduction.
The bottom line:
The only way to get ahead financially it is to spend less than you earn, otherwise you’ll always owe people money.
Then save that extra cash and you have sufficient invested it in assets that will return you income and that will grow in value, so that now your money will be working for you rather than you working for your money.
Moneymgmt makes budgeting simplified. Say goodbye to Excel spreadsheets and experience a new way of handling your money.
Full article: https://propertyupdate.com.au/how-to-save-money-13-simple-tips-that-could-save-you-thousands-this-year/
Thomas, R. (2020, November 19).How to save money – 13 simple tips that could save you thousands this year. Property Update.https://propertyupdate.com.au/how-to-save-money-13-simple-tips-that-could-save-you-thousands-this-year/