7 savings tips

Posted by: Tim von Dadelszen on 26 May 2007

Saving money can at first require a fair amount of determination - but if you follow the savings tips below you'll see that saving is actually easy and doesn't need to be a burden.

1. Keep a weekly spending log.

By doing this one first you'll learn about your spending habits and will be able to measure your progress. Keep a record of all of your spending for at least one week. Putting the numbers down on paper will show you just where all your money is going. Make sure you write down everything - item, price, time, and place - and it might also be a good idea to record how you were feeling at the time - what are some of the triggers that start you spending? Although keeping a spending log might sound like too much effort it's a useful first step - and could even be an enlightening experience!

2. Make it automatic.

Just like investment plans, it's a good idea for savings programs to be automatic. If you're having trouble saving then we recommend splitting your paycheck between your ordinary account and a savings account - the idea here is that you won't miss what you don't see. Living beyond your means shouldn't be an option - make saving a priority.

3. Create savings goals and develop a budget to help you reach them.

Goal setting is vital - if you don't know where you want to be you will more than likely end up nowhere. Remember to be as specific as possible in your goal setting - include dates and exact dollar figures. To help you reach your goals you'll need to develop a budget. After doing Tip One (above) you'll be in a good position to create a workable budget that you can stick to.

4. Become a smart food shopper.

It's cool to be frugal - and if it isn't cool then it's definitely smart. Shop in bulk and eliminate the unnecessary expense that comes along with running down to StarMart everyday. Do one major grocery shop a week and stock your kitchen with the basics. When you go grocery shopping, buy food that you can take to work for lunch - small, overpriced food from a trendy café is simply a waste of your hard-earned money.

5. Get organised.

Keep financial records in folders - or better still, start using money management software to keep your finances in top shape. One advantage of being organised is avoiding wasting money on fees. Banks charge fees at every corner so it's up to you to learn how to avoid these absurd fees. Review your monthly bank statements and find out what you're being charged for - most of the time fees will be avoidable.

6. Don't shop for recreation, shop for things you need.

Recreational shopping leads to overspending. Toss those catalogs as soon as the mailman delivers them, and never enter a shop without a list of what you need and how much you intend to spend. There are all kinds of rubbish excuses: shopping is my hobby, life is short, it makes me feel better. Make your purchases, and go home.

7. Use cash instead of credit.

Learn how good it feels to bring home something you've already paid for. The only good reason to use a credit card is to reduce bank fees. If it's something you can't pay for in cash then perhaps you don't really need it. Look for things you can live without and learn to say no. Giving your credit card a beating by shopping hard will only make you feel worse when the bills roll in.