Guys, I am on a mission- and that mission is to get debt free, and I mean debt free everything! I’m talking about paying off cars, credit cards, personal loans, hire purchases, student loan debt, I even hope to pay off my house sooner rather than later. Basically; if I owe money on it, I’m paying it off. I feel like nothing says I am a millennial quite like a having at least one car payment, a hire purchase or personal loan of some description and a student loan.
Well, I have been working hard for a while now and so far have paid off one credit card, my phone, some income tax and some student loan catch up payments that I had due and I am on a roll! So, I thought I would jump on here and give you my top tips for saving money and how we managed to pay down debt.
Let’s go
- Make a budget
You know the saying, if you fail to plan, then you plan to fail, so before a new month starts, we have a family meeting to discuss what we need to purchase (necessities only like clothing etc.). Then we plan out where each dollar of our income is going to go and where the leftover dollars will end up.
Your budget should go a bit like this, account for what you need to pay to run the four walls, food and transport, then allocate an amount to the extras you need to purchase that month, finally choose what debt any surplus you may have leftover is going to go to. This month any surplus went towards a phone that I have on an interest free plan with my service provider, and guess what? I now own that phone!
- Have an emergency fund
Nothing halts your momentum in getting ahead with your personal finances like an unexpected expense. We have an emergency fund and sometimes I think we should call it ‘Gary the cat’s vet fund’, as he’s our most accident prone pet and always ending up in the wars, but it could be that your washing machine is unfixable or you have a car repair to pay for and so having some cash in an emergency account can keep you from getting behind on the budget. Keep your fund small initially and keep it away from temptation, you should be able to plan ahead for most other expenses, like new tyres for the car or the replacement of worn out appliances etc.
- Keep up to date with reoccurring expenses
I meet a lot of people not able to pay some of their house expenses on time due to poor planning and this can incur some nasty penalties. For example, if you don’t pay your internet provider on time you can occur a penalty of $25 for that particular month. If you do this every month for one year, then that’s $275 extra you are ‘gifting’ away and that could be put to use elsewhere (like debt). If you have a regular pay check and the bill is a regular amount, plan to put money aside each week or pay in advance so that you are able to pay the amount in full and on time and not give away any more of your precious dollars.
- Make a shopping list before you go to the supermarket
Three simple rules for supermarket shopping; always make a list of what you need to prepare the meals you are planning on eating for that week (no winging it!), never go to the supermarket hungry! And thirdly, try and go once a week only, take the monthly budget and split the food amount into weekly amounts and shop for a whole 7 days. It not only saves money on food, but it saves time and fuel money.
Last tip, if you have a super tight budget for food, order online as it is easy to keep track of your spending and to swap out for lower cost alternatives, if you have to.
- Pay off debt
If you can pay off your debts, however many you may have, then you will have those payments that you were paying to keep for yourself. For example, if you are paying $500 per month on a car loan, when that is paid and gone, you will have an extra $500 a month in your budget. As long as you make a commitment to stop taking on debt and living within your means, you will quickly have more cash to snowball other necessities or debts like your mortgage etc.
- Insulate your home
Man, I live in a colonial bungalow house that was built in 1912, it was cold and draughty when we bought it 8 years ago I mean, it didn’t even have carpet so I can tell you all about how small and minor home improvements can help you in the wallet also. Slowly, over the years we have carpeted, put in a newer, cleaner burning fire, insulated the ceiling and underfloor areas, last November we invested in some decent thermal curtains that cover 80% of the windows in the house (still some more to go) and a few months ago I bought some decent bedding. Each small improvement we have made has been such a game changer to the toasty and cosy-warm factor of the home and has meant that our we require less heating and cooling than before.
- Audit your transportation costs
Take a good look at what you spend on transportation. It may be that you can sell your car and buy something cheaper to run, for example here in New Zealand, a diesel fuelled Ford Ranger is more expensive to run than a SUV Hybrid, a full audit on what you need vs what you want could save you some serious bucks and if you owe a heap of money on that vehicle, you could downgrade and save on a car payment at the same time.
Also things to think about are carpooling ideas for work or kids activities, or if you commute using public transport think about combining activities to cut down on the amount of trips you take.
- Stop buying coffees and takeout
I swear that most people could instantly save $100-$200 a month by reading this tip! If you don’t believe me, go to your bank account now and add up all the dining out expenses you spent your hard earned dough on for last month. We did this a few months ago when we first started budgeting, and we almost fell on the floor, we saved over $500 a month by stopping all takeaway and dining out experiences.
Even if you only bought 5 or 6 coffees a week, that’s $120 for a month for one person, that is a large sum of money when you are feeling the pinch like most of us in this high inflation environment. I would love to know how much you spend on food a month as a gluten free family, it is our most expensive line item!
- Set budgets for birthdays, holidays & Christmas
This is where I often breakdown, I go shopping for presents for my family with no budget in mind, and it results in spending more than I should have. I think this is probably tough for most people as buying gifts or holiday spending is often very emotional, I feel different when I’m buying toothpaste than when selecting a gift for my nieces eighth birthday. So, my tip here is, agree to an amount to allocate and shop around to get the best deals for the amount you have chosen to spend, it’s easy when you are prepared because of all the great online options you can search for. So have fun and think of all the big wins you will make by keeping tabs on the especially at the spendiest time of year (Christmas!).
- Your dollars are soldiers
Finally, each dollar is a soldier and should be put to work, and if you have no idea what they are doing, then the chances are, they ain’t working, well not for you anyway. So it is your job to put them to work, and keep them working for you. Wield your income to pay for the four walls, food and transportation, the best way you can and aim to not go into debt at all, otherwise you lose a lot of extra soldiers that could be working for you. These extra soldiers could be building you a lush retirement fund, paying off the mortgage or once you are a net worth millionaire, buying a brand new car with cash, this is what motivates me every day to do the hard things that put my dollars to work. You are in charge of your money and make sure you keep this top of mind on your money journey.
There you go, ten ideas that you can start on right now to make savings in your finances, which of these do you already do? Which one’s are you going to start doing? Let us know in the comments below and connect with us on socials for helpful links and an updates on our latest blog posts.
Em x
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