Money Saving Tips How To Budget

Our Very Best Money Saving Tips

1. Know Exactly What You are Spending

You probably know roughly what you are spending, but you need to spend at least a month writing down every cent you spend to discover where your money is going and understand what is “leaking”. The How to Budget system includes a simple spreadsheet spending diary - without that get into the habit of writing down what you’ve spent in a notebook or on your kitchen calendar when you get home each day.

It is important to be honest, the first step to making any change is to acknowledge current behaviour and face it head on. Once you identify where the money is going, there will be multiple opportunities to improve the way you handle your money and let you reach your goals sooner.

From there we recommend you commit some time to sitting down with your bills and working through a budget. We have a free budget planner excel spreadsheet available by clicking here.

2. Cash is King

The fastest and best way to spend less is to use the “Cash is King” discipline.
Once you’ve done your budget add up all the following discretionary expenditures; transport & petrol; lunch and takeaway food, alcohol, entertainment, coffee, cigarettes, magazines, lotto, gifts and interests. (Our system will calculate this amount for you) From now on you are going to pay for all these things only with cash from your wallet, to a preset amount each week, which you can withdraw as “cash out” when you pay for groceries.

You should be able to still have a reasonable amount that will allow you both to save and commit to not accessing bank account or credit cards for any of your discretionary items. It might be hard on Friday night after a few drinks, but trust us, it is the absolute best way to put yourself back in touch with your money. On top of this set a single monthly budget for clothing, accessories, hair, cosmetics and do not exceed it.

3. Keep your Goal Front and Centre

Whilst many of our suggestions are “no pain, all gain”, to get the best results and accumulate quickly there may be some sacrifices. To keep yourself motivated you need a definite goal; it may be putting savings towards a big purchase or reducing debt as rapidly as possible; but it should be something that will inspire you. We then recommend you write this up and display it to remind you of your commitment.

The How to Budget E-Book and System includes a stylish graphic for you to fill in and pin up somewhere visible to help you stay on track. We also recommend that you “chunk down” the task and have some timed milestones to celebrate along the way!

Once you’ve defined your goal, our system will show you how to make the savings you need to achieve it!

4. Let your Fingers Cut Your Living Expenses

“Compare” is one of 6 very simple strategies that we recommend to slash literally thousands off your annual expenditure.

Once you have tracked and budgeted for your living expenses, it will definitely be worth your while to invest some time comparing your suppliers. The ability to find, search and contrast deals quickly on the internet means that an entire category of businesses have sprung up enabling you to quickly and easily compare your current deals - just by Googling your service with the word “Compare”

Most of you will find better deals just a click away, particularly on your services as few people are in the best possible products for mortgages, credit cards, phones, broadband, insurance or health insurance and potential savings are in the thousands!

How to Budget has an extensive set of links to businesses that will enable these comparisons.

5. Use Up the Stuff in Your Cupboards!

Here is a great way to save! Do you know exactly what is in your cupboards? Right up the back? Just total up in your head what you spend on all the following categories; toiletries, cosmetics, cleaning products and laundry products. Chances are you don't need to spend another cent for at least 3 months on any of these things!

Not to mention clothes, food and toys.

If you're like me you have a bathroom cabinet, kitchen or laundry cupboard full of half used bottles cluttering up the place. Not to mention (ladies) the amount of make up and cosmetics you may have lying around. Put aside a Saturday afternoon to do a cupboard inventory, it doesn't take long and can really save you lots.

Once you know what you've got, use the old depression era frugal tip and use up what you have before you buy any more! Another example of a great win win saving tip as this way you are both decluttering your life and saving a lot of money by knowing what you already have.

More space in your cupboards and spend less at the supermarket for a few months.

6. Shop Your Pantry First

In a similar vein is our next tip - did you know organised people spend less and stress less! To save money organisation is key and some of the biggest wins can be had in meal planning. Organise your pantry so you can see everything and shop there first (ie before you head to the supermarket) to plan meals for the week ahead using what you already have. Prepare a list and buy only what you need. Don’t be tempted by specials that you may not use as they will just languish in your food cupboard.

A win win tip is to plan simple meals with limited ingredients on a weekly rota so your grocery needs are consistent and simple. To help we recommend the bestselling book “4 Ingredients” to give you meal ideas that save effort, time and money. Coles has also recently been putting out lots of simple, tasty under $10 recipes. At How to Budget we share many more simple ideas on how to get organised and see both your finances and stress levels improve!

See our blog entry on Simple Saving’s brilliant $21 challenge

7. Shop or Research Online - Big Ticket Items

The internet has dramatically reduced many retailer’s cost of marketing and their overheads, enabling them to pass on lower prices on many everyday categories. For example, I use Bowhouse to get my dogs’ regular worming and flea treatments, with a saving of about 30% on veterinary retail prices. I also buy vitamins and supplements and nearly all my books / DVD’s from internet merchants, both here an in the US.

There are a lot of price comparison websites around, one that is easy to use is Get Price. http://www.getprice.com.au/

If you prefer to shop in the main stores, if you know what you want it is worth checking out this website which shows many of the big store’s weekly catalogue specials - including Aldi’s catalogue. A brilliant service. http://www.lasoo.com.au/

So impressed were we with the money saving potential of shopping around on the internet the How to Budget E Book and System includes an Internet Resource Library with 8 categories for you with all that we have found!

8. Grocery Smarts

You can save a lot on your weekly grocery bills with some minor changes. If you can, try shopping for staples and fresh food at Aldi. You are very likely to become an Aldi convert when your first shop is around half what you might expect it to be.

If your local “big guy” supermarkets are open late, shopping after dinner is a win win; you are not hungry or as likely to shop “off list”, there are fewer people there and lots of fresh food gets marked down very significantly (but you must freeze it or eat it).

Farmers’ Markets can be a win win, saving you money by buying direct from the farmer and improving the freshness and quality of the produce.

How to Budget has a full section devoted to finding big savings on your grocery bills and helping you outsmart the supermarket’s tricks.

9. Make Thrift a Habit

Two years ago calling someone “thrifty” was likely to be a thinly veiled insult. How wrong it now seems! Being thrifty isn’t being a tight arse, its resourceful, can lower your stress and anxiety and shrinks your ecological footprint along with your spending.

In the course of researching “How to Budget” we read about how people coped in the great depression and found the following ditty that encompasses the habit of thrift and is now stuck on my fridge: “Use it up, wear it out, make do, do without”.

I have discovered a great sense of achievement from learning how to live better whilst spending less. I certainly no longer envy “the Jones’s” at all – I now perceive “them” as materialistic, indulgent and most likely struggling under a huge debt burden. We’ll challenge you to change your attitude and you may find it is much easier to live “lighter” with less stuff and much less debt!

10. Save the Earth

Most “Earth saving” tips save your wallet too! All the great pointers from the electricity and water providers will reduce your usage and your bills. Before researching How to Budget I didn’t know that hot water could be up to 30% of my electricity bill, so now I never run hot water in the sink and wash clothes in cold water.

You will notice we are always trying to look for tips that we call win, win. This means you can save money and gain benefits in other areas of life. For example trying to use your car less frequently saves you significantly in petrol and maintenance and by walking further your health and fitness also improves.

There are many more of these Earth and money saving revelations in How to Budget!

11. Socialising “Lite”

Your leisure and entertainment budget may be the “low hanging fruit” of your spending. Of course you have to live and must catch up with your friends, but challenge each other to think of low budget (or no budget) activities.

My friends are all aware that my social budget is $20 a week but I enjoy myself and spend plenty of time with them. We go for walks, to the beach, to the pub to play trivia or to grab a couple of drinks on a Sunday afternoon. With other friends it is a weekend brunch at an inexpensive café, a movie on cheap Tuesday or BYO gatherings at home with simple food (ie no expensive cheese platters).

True friends just want to hang together, the setting is not the attraction. There are loads more ideas on cheap socialising see the How to Budget E-book.

12. The Gift of Imagination

Across the year you probably spend many hundreds, even thousands on gifts. As a generous person, gift giving is likely to be important to you, but you can use your creativity and give presents that cost very little but your time or attention. $2 stores are brilliant for creative people, for a close friend’s birthday you could dig out a long forgotten photo and put it in an inexpensive frame or decorate a box for their treasures and old letters.

Even more fun can be giving a “voucher” for your services as a babysitter, chef, driving instructor or gardener. I made up a humorous babysitting voucher for my friend Diane that was better received than years of presents! How to Budget has a whole chapter on gifts and will teach you a creative technique that will give rise to loads of ideas that can reduce your spending.

13. Pocket a Fiver / Goldies for Holidays

This is a great tip that I read somewhere and have followed since. Every time I have a $5 note in my wallet I put it in an envelope (or another pocket. You probably won’t notice $5 missing, but you may find you’ve put aside $85 in no time! Some people take this further and use Pocket a Fiver to fund some little luxuries or diversions, others use it for those dratted unexpected expenses.

Similar is the “Goldies for Holidays” where your household puts gold coins into a money tin that can only be opened with a can opener - here are some that were at my local $2 shop. I have heard of people having over $1,000 towards a holiday using this strategy.

We also recommend putting your credit card “on ice” until it is paid off - JUST one of the great behavioural change tips in “How to Budget”!

14. Bartering, Swapping and Free-cycling

The rocketing popularity of the “Simple Living” philosophy (voluntary simplicity, which is covered in more detail in “How to Budget”) is highlighted by the rise of bartering and swapping. This is another “Depression Era” solution to the current financial crisis.

Bartering is basically exchanging goods and services outside the financial system. To try bartering, a good starting point is a babysitting club amongst parents (with a few rules so that no one is taken advantage of). Bartering works particularly well for small business owners and service providers, for example, Kelly Love, our decluttering expert, barters her services with friends for things like massages and hairdressing.

There are a number of swapping websites; try http://www.swapace.com.au/ which is run by a friend. You could also try the Freecycling movement, where people offer things for free and you can give your “stuff” away to a good home - though you may receive lots of additional email, it is best to set up a separate mail folder! http://freecycle.org.au/

Whilst How to Budget focuses on reducing your spending, we advocate that for things you need, choose to spend at small, local businesses and keep money in your local community.

15. Grow your own Vegetables

This is another win win – it’s engaging, saves money, is healthy and better for the environment. A great way to get the kids involved and you may have left over to barter with neighbours. This website has a page on a box garden that will make it very easy to get started:

Starting a box garden: http://www.survival.org.au/box_garden.php

(I have to confess I have got a big carried away and “invested” quite a lot of money in my vegetable garden, so the box garden is smart way to start small until you know this is for you!)

In our “Internet Resource Library” we connect you with a few more links that might help you start growing your own organic vegetables.

16. A New Philosophy - You’re On a Spending Diet

From today, you are on a spending diet! If you have ever dieted before you know you don’t leave your cupboards filled with tempting foods, you buy fresh fruit and salads. If you were to eat out you’d choose somewhere with great salads that you could enjoy. Small changes can yield very big results and at How to Budget we will tell you the simple tricks of those on a Spending Diet © – they are getting into better financial shape every day!

We are very proud of the results being achieved by members on our unique diet, check it out and see how easy it is to “lose debt” forever!

17. And finally, - Share the Burden and Get a Saving Buddy

One of the great ways to commit yourself to saving is to find a friend / partner / sibling / even parent) in the same position as you and use each other as motivation and discipline.

You and your buddy need to get together to set some goals that each of you can support. You might want to pay off your credit card in six months, your friend might be saving for a trip or first home.

Agree some rules - if you have done our "Cash is King" exercise with your spending diary and budget plan you have a small discretionary weekly spend in your purse but anything beyond that you need to be in touch to "ask" the other about a purchase. I know having to call my friend to justify those new winter boots (which will hardly get worn by the way) would make me put them down and walk out of the store.

You might also need a disclosure rule where you each review each others credit card statements and budget plans, just to make sure you don't get tempted to sneak!!! The important thing here is you do have to commit to getting in touch for "permission" and you do have to to commit to saying no to the other person!

What to do as a buddy if the other person is tempted to "break out" and won't listen? How about the 24 hour cooling off rule, where you have to reassess whether you still really want the item 24 hours later. I know that lots of my impulses don't pass this test and it has been a great help to me!

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