Guide to Stop Spending and Start Saving

Piggy_on_Money1

I like to think of myself as a reformed shopaholic. Once upon a time, not so long ago, I had aΒ pretty bad online shopping addiction. It’s so easy and convenient, a click of the mouse and your outfit for the weekend is at your front door the very next day. The downside? It’s extremely easy to overspend as I found out the hard way and struggled to save any money. I decided one day enough was enough and began to budget my money accordingly. Here are my top four tips to saving money, enjoy!

Manage your bank accounts

This one should be obvious but it’s amazing how many friends I’ve spoken to who don’t know how to manage their money and always complain about bills being due and being broke all the time.

Open up a second everyday account to use for bills e.g. rent, electricity, phone, registration, insurance etc. Next, calculate how much money you need to put away each week (of fortnight if you’re paid fortnightly) to cover the cost of all your bills. Set up an automatic bank transfer on payday to transfer the money into your bills account. This way when your next bill arrives the money will be there waiting and you won’t be stressed about digging into your holiday fund to cover your cars registration.

The next step is to set up a savings account if you don’t already have one. Use this account for general savings and put any extra money you have after your living expenses, bills and social money have all been accounted for.

If you are saving for something in particular such as a house loan, car or overseas holiday I would recommend opening a goal saver account. Goal saver accounts generally have a higher interest rate if you can save X amount each month without withdrawing any funds. I would recommend setting up an automatic transfer to this account on pay day as well even if it’s just $50 a week to kick off your savings. If you have a really good pay one week you can manually transfer the extra funds.

Carry cash

Avoid carrying your debit or credit card and take cash instead. Pay pass is a great invention; simply pay with the touch of your card. The downside to this is that it’s hard to keep track of how much you’re spending and before you know it you’ve spent your weeks pay in one day (or night if you’re out drinking). This way you can pre-plan how much you’re willing to spend and cut yourself off when you’ve hit your limit.

Avoid subscribing to online newsletters

Unsubscribe to online newsletters or opt out of receiving emails from companies. I’m the worst when it comes to this. If I receive an email from one of my favorite clothes companies advertising a sale I almost instantly open the email in a new tab so I can start online shopping. By sending these emails straight to the junk or choosing to unsubscribe it eliminates the temptation to spontaneously splurge.

Start a piggybank

You may remember owning one of these as a kid, you would do some chores around the house and your parents would pop a dollar coin (or a $5 note if you were lucky) into your piggy bank. Same concept, except in this instance you will be the one depositing your leftover change into the jar. Whether it be a new tattoo or those new Louie Voutine’s you’ve been eyeing off a piggy bank is a great way to save. Empty your loose change from your wallet or handbag once a week and once you’ve hit your target reward yourself.

MCD xx

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