Happy new year! 🙂
The start of a new year is filled with promise and excitement. Many people feel that this is their chance to start a fresh, correct past mistakes and improve aspects of their lives that they are not happy with.
As you can see in the video below, new year resolutions around saving money are some of the most common, coming only after things like losing weight, stop smoking, exercise and travel.
This is hardly surprising!
After all, money is such an important factor of everyday life and affects almost every aspect of our lives. It also enables us to fulfil many (albeit not all!) other new year resolutions we set ourselves (e.g travel).
Unfortunately, the concept of financial literacy didn’t exist for most of us back when we were at school so we were all left to kind of ‘fend for ourselves’ as we left school and entered ‘real life’.
As a result, many people end up feeling overwhelmed and give up on their money-related new year resolutions. As a matter of fact, the ‘failure rate’ for money-related new year resolutions is higher than any other type of resolution (yes, even higher than things like losing weight!).
A survey conducted by comparison site Finder in 2016 revealed that that one in three people break their new year resolution by the end of January and that increases to four out of five by July.
As you can see, from a statistical perspective the odds are stacked against you. However, you can still WIN and meet your new year resolutions around saving money (and many people do that successfully every year!).
How to Succeed in meeting your resolutions around saving money
First, I should start by saying that there is absolutely nothing wrong in asking for help from the pros if you don’t think you can do this on your own.
If you struggle with debt or are in some other serious financial strife, it is worth seeing a financial counsellor. This is completely free and you can locate one using this website.
If you have the basics covered and want someone to help you with your investments, you can consider seeing a financial planner (who will charge you a fee for their service). This article should help you decide if you need a financial planner and if so, how to choose the right one for you (as there is no ‘one size fits all’ with this one).
“What can I do on my own”‘
Quite a lot actually so if you’re more of the D.I.Y type, read on!
You have probably heard before that you should make your goals (any type of goals, not just those around saving money) SMART.
SMART stands for:
When it comes to saving money, I reckon that the S (Specific), M (Measurable) and T (Time-bound) parts are especially important to get right.
This is because they will allow you to get ‘quick wins’ on the board and feel that you are making progress.
When you can see that you are making progress (a.k.a winning!), you feel motivated to keep going on. This is simply how us humans are wired.
While the A (Achievable) and R (Relevant) are important for general goals, I feel that when it comes to saving money, they take a bit of a back seat.
This is because you usually don’t know what is achievable until you start looking for alternatives (e.g. shopping around).
As far as relevancy, it also often takes a second place to what change can actually yield the most savings.
Therefore, when it comes to setting your goals around saving money, ask yourself the following three questions:
- What expense do I want to save money on? (this covers the “Specific” part);
- How much do I want to reduce this expense by? How much savings (in either percentage or $$$ amount) will you be happy with? (this covers the “Measurable” part); and
- By which date do I want to achieve this reduction? (this obviously covers the “time-bound” part).
Practical tips on saving money in the new year
Saving you money is what we do here at Spending Hacker!
This is what my team and I live and breath every day (not just around new year 🙂 ). As a matter of fact, this is the only reason this website even exists.
Therefore, if you want to save yourself some (or lots!) of money, as well as the time it takes to do your own research, maybe you should join us if you haven’t already (yes, it’s a shameless plug but given it costs nothing to join, I think you’ll forgive me 😉 ).
To give you a few ideas of specific things you can do to save money, I reached out to a few bloggers, both in Australia and overseas and asked them for their best money saving tips.
Before we get to that though, I reckon you should read this article outlining 5 phone calls you need to make ASAP and which can save you some serious coin without you even getting off the couch or even getting out of bed if you are that way inclined.
Unlike other new year resolutions, saving money usually doesn’t require much physical exertion or denying yourself that extra piece of cake… 😉
If you want to take saving money to the next level, you should also read this interview I did a few year’s ago with Australia’s “First Lady of personal finance”.
You’ll learn there how you can save $5000 in 5 days (so that’s a ‘daily rate” of a thousand bucks a day, not bad! 🙂 ) as well as why she got this title.
Alright, now that I’ve got this intro out of the way, let’s get cracking!
Kim Reddy from ‘New Mumma Kim’:
Kim is a young Aussie mum living in South Australia.
Her blog is all about her own personal experiences as a first time mum and she often discusses the challenges she is facing balancing the family budget with another little person to feed and clothe.
You can learn more about her here.
After Kim got pregnant, her family’s financial situation has changed a fair bit and they had to start planning how they are going to survive while living on a single income, while their mortgage repayments were only able to be sustained with a dual income.
This is obviously a very common scenario that many Aussie families are facing all the time.
Kim stopped working when she was 36 weeks pregnant and was out of the workforce for a total of 15 months before returning to work part-time.
Despite all this, The family was able to survive, pay their bills and meet their other financial obligations.
Here is what Kim and her family did:
- As soon as Kim knew she was pregnant, the family consolidated all their debts except their mortgage into a single loan.
- They started keeping accurate records of their income and outgoings in order to easily identify the areas that need addressing. (you can use this free tool to do that and if you are using our recommended bank account, this capability is already built-in so no extra tool required).
- They got the absolute best deals they could find on their mobile and broadband.
- They renegotiated their home and car insurance on their two cars by bundling them all together with the same insurance company.
- They switched to a different private health insurance plan. The new plan coveredf them for the same things as their existing plan but cost them $45 less every month.
- Kim and her husband both stopped smoking. This was mainly for health reasons (as they were about to become parents) but it also obviously came with some sweet savings in the hip pocket too! 🙂
- They completely stopped buying takeaway coffee and food. You may think that is not something you can or are willing to do but you may reconsider your stance after I tell you that this saved Kim and her family $130 every month! 😉
- They started pre-planning their meals for the week to make sure no food goes to waste and also to lower their grocery bills. This can be a great thing not just for your wallet but also for your waistline. We have a few tips to help you with that here.
- They turned off any lights and electrical appliances at the wall when they were not being used. This is a simple and easy way to get some quick wins with your power bill and you can find a few extra tips here. Also, always (always!) make sure that you are on the absolute cheapest electricity plan available in your area. Electricity is the ultimate ‘commodity product’ which means that all the providers are selling you the exact same thing. Therefore, price should be your only criteria!
For the full details of what Kim did as well as the rest of her action steps, check this post on her blog.
Melissa Goodwin from ‘Frugal and Thriving’
“My best advice will be to reduce waste wherever you can!”
Some specific areas where Melissa thinks there is a lot of waste that can be reduced relatively easily are food, electricity, water, disposables, maintenance and taking on any debt that is not absolutely necessary.
You can read all her tips in full here.
Mandy Gambier from ‘My Lovely Little Nest’
Mandy lives in Sydney with her husband and three kids.
“My best advice is to plan your meals in advance”
This is common advice I have heard from many bloggers, especially those who happen to be women 🙂 .
This advice is common but more importantly, it works!
You can read Mandy’s tips on how to plan your meals in advance here.
Kylie Travers from ‘The Thrifty Issue’
I have known Kylie for several years now and she is a truly remarkable woman (no joke!).
After managing to escape from an extremely abusive and violent partner and even being homeless for awhile, she managed to build a new life for herself and her children through hard word and sheer determination.
All this despite facing quite a few setbacks along the way as well as a fair few health scares.
She is a passionate advocate for the homeless and disadvantaged and speaks regularly about these and other topics in various conferences both in Australia and overseas.
You can learn more about Kylie and her remarkable life story here.
The Thrifty Issue is one of Kylie’s projects and is dedicated to helping people (mainly other women) take control over their finances and get off welfare whenever possible.
Her tip for saving money is:
“Look at ways to get things for free (legally and ethically) before spending copious amounts of money on stuff you do not need.”
Such great advice! Isn’t it?
After all, getting something for free (without breaking any laws or ripping off anyone obviously) is the ultimate spending hack.
You can’t “Spend Less and Get More” than this! 🙂
You can read the full list of things you can get for free (all 50 of them!) here.
Also, don’t forget to always claim cashback on your online shopping and financial products.
Joseph Hogue from ‘peer finance 101’
Joseph in an American blogger with a background in corporate finance and investments.
He led a team of analysts in a private equity firm in Canada and has even appeared on Bloomberg, the most respected financial TV channel in the world!
“Check out the deli department of the supermarket. Since they don’t have to pay for packaging, they can usually sell meat and smallgoods for cheaper than the packaged stuff.”
Joseph has 20 other tips to save money that can help you save more than $7,500 a year.
His top 5 tips are outlined in the video below:
David from ‘Strong Money Australia’
David has managed to achieve something truly remarkable.
He has managed to reach financial freedom and retire from the workforce in the beginning of 2017 at the ‘ripe old age’ of….28!!
Yes, you read this right. 🙂
This is not a scam and David is not trying to sell you any program or seminar, or anything else for that matter.
All he is trying to do with his blog is to show people how he did it as well as what he considers to be ‘retired’.
You can read his story and ‘manifesto’ so to speak here.
Here is David’s tip:
Reduce car ownership costs by questioning yourself and looking at each part of it.
Cars are deceivingly expensive!
No car loans.
Consider downsizing to lower cost/more economical vehicle.
Consider switching one car for scooter.
Ditching you car for public transport/Uber/ Car Sharing.
Walk and bike ride more.
Move closer to work/ closer to public transport.
Recognise the huge opportunity cost having capital tied up in vehicles. Investing this cash combines with car use tweaks adds up to almost $100k in many cases.
Once we break the unhealthy habit of seeing cars as part of our personal image, we become free of the bullshit and change our transport costs forever.
Just to remind you, this advice is coming from a 28 year old Aussie guy! Pretty impressive, don’t you think?
This kind of approach is pretty rare when it comes to an ’emotional’ purchase like a car, especially coming from a young bloke.
This attitude probably explains why David is in the position he is at, at such a young age. 🙂
Cath Fowler from ‘Get Money Wise’
Cath is another remarkable Aussie woman I had the privilege of knowing over the last year or so.
Cath is married with two young kids and has a background in marketing and copywriting.
She is also a millionaire, at least on paper! 🙂
You see, Cath has a net worth (assets minus liabilities) of over a million dollars which technically makes her a millionaire while still in her early 30s.
Cath achieved this status through property investment and smart money management and aims to help others do the same with her blog.
A good place to start will be to take her free ‘Kick Start your Wealth’ challenge.
You can read more about Cath here.
Here is Cath’s tip:
It’s a debate for another day whether paying off your mortgage or investing elsewhere is the best way to grow your wealth, but for me personally owning a home mortgage free was an important goal for early retirement.
My top tip for saving on your home loan is to not get complacent!
Every year I would check what rate I was on and look at what was out there in the market to see if what I have is still competitive.
If not, I called up my bank and ask for a review and have also refinanced a few times.
Cath has a detailed post on her website with 14 specific things you can do to save money on your mortgage and pay it off faster.
“Miss Balance” from ‘All about balance‘
Obviously this is not a real name but rather a pseudonym.
While I know the real name of this Australian lady, she prefers to maintain her anonymity and I respect her wishes.
Here is her tip:
How many times did you eat out or grab a coffee last year to celebrate a milestone, a birthday or to just hang out?
How much money could you have saved if you had the same conversation over a cup of coffee at home, a picnic at a local park or a pot luck dinner?
You can save thousands of dollars per year by changing the way you spend time with the ones you love.
I challenge you to slowly shift your catch ups to a Saturday morning stroll, or a Sunday afternoon BBQ at home and see the difference it makes to your wallet and your relationships.
While this advice may not work for everyone, I can definitely relate in the sense that this advice encourages you to spend with your friends and loved ones the most important resource we all have and the only thing we can never ever buy more of, no matter how much money we have: TIME.
Definitely something to think about, don’t you think?
You can read Miss Balance’s thoughts in full here.
That’s it. Congratulations on making it this far!
Which of these tips resonate the most with you? Do you have any of your own you’d like to add?
Don’t keep them to yourself. Leave a comment and let the rest of the world know. 🙂
Before you go:
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