What is your current financial situation? You might feel on top of things. You may be working to reduce debt, saving to give your family a better future by starting a business or purchasing a home. You may be working on building a cushion of money for your children’s education or even your eventual retirement. You may see yourself as financially responsible, working to a personal budget, making sure you clear the monthly balance on your credit card and tucking extra funds away for a rainy day. But the truth is that our budgets should be something that constantly evolves – as situations in our lives, jobs, families and the wider world change, as the things we want to save for develop, and as circumstances shift. A budget isn’t something to set and forget – it’s a living thing, which fluctuates to reflect seasonal events and other factors. And even if you think you’re fairly good with money, there are always ways to revisit your plan and identify new ways to save. If you want to pay down some unexpected debt as quickly as possible, or save up an amount without waiting years, you’re going to need to figure out how to spend less money – and the surest way to do that is to review and trim your fixed monthly expenses.
The secret is to leverage the power of cumulative savings – small amounts of a lot of individual costs. They may seem insignificant, but when taken together they can quickly add up to larger amounts. And if you’re consistent with it, you can soon find yourself making big inroads to your financial target. Once you’ve made a few changes, you’ll get the ball rolling and soon be thinking of lots of other ways to add to your savings.
Saving Money On Transport
For many of us, transport is a necessity – it gets us to work, it transports our families around, and otherwise helps us run errands. But there is no denying that owning a car is a huge expense. It isn;t just the initial purchase – the cost of vehicle maintenance can really eat into those monthly expenses. You may have car loan payments alongside repairs and regular maintenance as well as the rising cost of fuel. It’s little wonder then, that the annual cost of car ownership is estimated at nearly $9,000. In the light of those numbers, is it time to consider how transport could be done differently, at least for a year or so while you work towards your financial goal? Take a look at your options for public transport – you may have initially dismissed it out of hand, but have you really looked into the practicalities. The savings on gas, parking charges and servicing are going to make a huge difference to your budget over a year. In some ways, taking public transport to work can even help us by giving headspace and time to zone out with a podcast or a book that you don’t get when you’re driving. Even if you only replace a percentage of your car journeys, you’ll still be saving wear and tear on the vehicle as well as the cost of fuel. In addition to public transport, you could also try looking at rideshare services like Lyft. If you live in a large town or in a city the coverage is good and you really can do without a car very comfortably. You could also look at car clubs, which operate in some cities and give you access to a vehicle when you need to drive somewhere, whether it’s doing the food shopping or getting to a meeting. One payment replaces the cost of car ownership, insurance payments and vehicle repair. Your work may also have a carpooling scheme that you could join if you want to cut down how much you’re using your own vehicle. Save on gas, reduce wear and tear on your car and take advantage of carpool lanes. You should also make sure that you shop around for the best prices on gas when you have to fill the tank, and keep your tyres filled with the correct amount of air – this cuts the amount of fuel you use when driving.
Saving Money On Insurance
Sometimes in life, the unexpected happens and we need our insurance cover to guard against the worst case scenario. However, many people overpay for their insurance coverage and you can make a big saving by revisiting the expense. For instance, there are ways to lower the cost of your monthly health insurance by switching to a high deductible policy. If you don’t have any ongoing health conditions or use medications on a regular basis, and you’re generally in good health, then this can be a great option where you still have coverage for health emergencies but aren’t paying out lots each month. You should also make sure that you shop around for home and auto insurance or bundle services together with a provider like Morison Home Insurance to get a better deal. And if you are paying for whole life insurance, you can go for a cheaper term policy instead, which presents a significantly lower yearly cost, even with similar levels of coverage. You could also look at raising your deductible amount to reduce your annual premium and reduce the monthly bills – you can always raise it again later, after you’ve achieved your savings goal.
Saving Money On Debt
If you’ve made financial mistakes in the past or had unfortunate events happen which have led you to be in debt, then servicing that debt can become a huge drain on resources each month. If you can manage to pay off more, then you can also put more money towards saving. It makes sense to repay as much as you can, but how can you make the same amount of debt cost less? For a start, look at all your owings and try to minimise the amount of interest you pay. If you have a mortgage, check if you’re eligible to refinance it and lock in a lower rate. You can then choose to put the money saved towards paying off other debts with a higher rate of interest. It may be the case that your credit score has improved since you first applied and you can now qualify for a lower rate of interest – if this is the case, then try to see if you can refinance on more favourable terms. If you have multiple sources of debt spread across credit cards and unsecured loans, then try the practice of snowballing by concentrating your payments on the product with the highest interest rate – move as much of the debt as you can to the card with the lowest rate of interest or apply for a consolidation loan and pay off as much as you can of that balance. You must always take into account any fees you incur and also be sure that you can meet the monthly payments on time, but this technique can really help you to pay down debt faster and free up more income for other things.
Saving Money On Energy Bills
We use more electronic gadgets than ever, and there’s no doubt that it shows in our ever-rising energy bill each quarter. With hotter summers and colder winters as our weather polarises into extremes thanks to the effects of climate change, that adds up to a lot of money on providing power and light to our homes. Thankfully there is also lots of new technology that can help us improve the energy efficiency of our home, save money and save the planet into the bargain. Replace your bulbs with LED bulbs – these use around four times less energy, and kick out a really good amount of light. In fact, you could save more than $40 on each electricity bill by making this one swap. If you don’t already have one, a programmable thermostat is also a must so they you can automatically change the temperature of your home – even when you’re out and about. By only heating or cooling your home when necessary, you can really save on the bill. In fact, you’ll wonder why you never did it before! Similarly, get into the habit of not leaving electrical devices plugged in all the time, as they draw a phantom charge – admittedly a very small amount of electricity, but if you think of all the different appliances you use, you’ll see how it can quickly add up. You could also consider a digital timer plug, especially if you have bad habits like falling asleep with Netflix on auto-play! These shut off the power automatically at a predetermined time. And the very simple act of lowering the temperature of the thermostat and hot water by just a few degrees – or of washing clothes at lower temperatures – can save big. Hot water is a huge energy drain which accounts for a massive 14 per cent of home energy costs. Heat is lost into the environment and most of the water is kept hotter than you need to use. Make a few simple changes like this and costs will begin go down – meaning your savings can soon add up.
