It’s pay day tomorrow. You promise yourself things will be different this time. You absolutely won’t have to resort to home brand ramen to make it through the week. You won’t – oh, who are we kidding? Your money will be gone by next Saturday unless you get off your butt and choose to change your spending habits. It’s not as hard as you might think. Here’s how to go about it:
Do the math
Work out how much money you want to save this year and divide it by 52. Congratulations! You just found out how much you want to save each week. Does the figure fit within your means? If not, adjust until you can cover all your bills and other necessities while still meeting this savings plan.
Pay yourself first
When your pay comes in, take out the allotted amount for bills, food and any other necessities. Now, before you head off to the nearest shopping centre, giddy with the thought of the new purchases in your future, pay yourself. By which I mean “put money in your savings account”.
It’s easy to say “I’ll put whatever money I have left over into my savings account” but it’s a lot harder to actually commit to it. Meet your savings budget and then party with whatever’s left over rather than the other way around.
Find a high interest savings account
The best thing about a high interest savings account is, well, the high interest you earn on your savings. The second best thing is that most high interest savings accounts don’t have immediate access. So you can’t just dip into your savings to get that cute new dress. This will help nip your impulse shopping in the bud.
Pay off your debts now
Unfortunately, overdue bills won’t disappear just because you ignore them. (I know this from experience.) Interest rates on overdue credit card bills are RIDICULOUS. Start making small payments now and you’ll be able to carve through the debt before it gets way out of control.
Make some money
OK, yeah, you have a job (I mean, probably) but I’m talking about selling off the stuff you don’t need. Clothes that don’t fit, furniture that doesn’t fit your décor, books you won’t read, DVDs you won’t watch – you probably have stuff lying around that could be making you money.
“It’s only worth a few bucks,” you might say. Well, yeah. But each item that you sell for a few bucks adds up to a whole lot of bucks in the long run.
Let’s say you pay $10 for lunch five days a week. That’s $50 a week. Now let’s say you work 48 weeks a year. That’s $2400. If you’re spending $15 a day, that’s $3600. That could cover return international flights. TWICE. (Economy class – don’t get greedy.)
Get your butt to the grocery store and shop for a meal that will reheat well. Stir fries, pasta, roast veges, pestos, etc. Seriously, go for gold. Make enough for dinner and enough for at least one lunch, if not more. Now you can have a rad holiday.
And don’t even get me started on the average cost for a cup of coffee. I am being serious when I say this: invest in a coffee machine or convert to instant coffee if you can deal with the taste. Cost per cup will decrease rapidly and you’ll still get your caffeine kick.
Do your research
From now on, never walk into a store and buy something without checking the price elsewhere. Call other stores to see if you can get a better deal. Once you’ve found a better price, see if a store will beat it by 10 per cent. The five extra minutes you spend on this task could save you hundreds.