Saving

[freddy mercury]

how do you save? I struggle so bad to save just after some tips or ways you save your money, thanks!!!

 

[dr0ne]

I always keep a separate savings account and deposite money in it when I get paid, BEFORE I spend other money. That way, I'm not just spending and then left with nothing to save. I know I've saved no matter what.

You should make sure you know what your expenses are exactly before you do this, so that way you're not running short trying to pay your bills. Make sure you have enough for your bills, then asses how much extra you have and decide on an amount to save (if you can, it should be at least 10% of your income). The rest you can spend

 

[Old M8]

I penny pinch, and also don't buy things unless it's a need. I'm 18 and have about $10,000 in my account, im not a huge fan of going out though, so I don't piss much of it away.

It's not all that hard, just spend money when you need to. There isn't a secret to saving, really.

 

[Ghostwriter]

Spend less than you earn, pretty simple stuff really, if you can't do that, start looking for a park bench to sleep on.

 

[Caesar]

I started saving with my first payrise at work. I just told myself I had to keep living the same lifestyle as I was before, as if I didn't get the payrise, and moved the extra money across to the savings account each fortnight when it hit the bank.

Every time I get a payrise, at least half of it goes straight into savings (and usually it's more than that). I never get used to having the extra money in my pocket, so I don't miss it. I'm a single guy in my 20s so it's not really hard to keep my living expenses down.

Money management isn't rocket science. You just need a plan, and the discipline to stick to it.

 

[Scotland]

Spend less than you earn, pretty simple stuff really, if you can't do that, start looking for a park bench to sleep on.

Yep, it's pretty simple really. Doesn't mean it's easy, but it is simple.

I get paid monthly (end of month) and my biggest expense (home loan) also comes out monthly (mid month). I simply look at my balance at the end of each month and it's more than it was 30 days ago then I'm on on the right track.

In terms of practical savings advice it depends on your circumstances. As a student or full time worker in a low paid position it's always going to be harder to save than if you're a young professional with no kids, mortgage etc. If you want to put a plan in place to save $x a month you need to sit down and look at your incomings and outgoings and work out the differential and whether the former can be increased/latter decreased - then stick to your plan. I think people get sucked into the trap of spending more as they earn more just because there's more money in the wallet each week.

I've never set out a budget or decided not to go to the pub because I spent $50 the night before and that's enough entertainment for that week etc. My circumstances are probably similar to Caesar's and I agree that keeping living expenses down isn't hard if it's something you want to do.

 

[fairdinkum]

Every time I get a payrise, at least half of it goes straight into savings (and usually it's more than that). I never get used to having the extra money in my pocket, so I don't miss it. I'm a single guy in my 20s so it's not really hard to keep my living expenses down.

Bit OT, and no offence, but I could've sworn you had posted in a number of threads about having a girlfriend/fiancee.

 

[Caesar]

Bit OT, and no offence, but I could've sworn you had posted in a number of threads about having a girlfriend/fiancee.

Girlfriend. I meant single in the financial sense. No shared finances or liabilities, no dependants, etc.

 

[fairdinkum]

Ah, fair enough. Thanks for clearing that up.



(I've said for a while now that one tends to build up a profile of posters (whose posts one reads regularly) to the point where one seems to know random dudes on the net better than one knows one's own family and friends sometimes)

 

[Scotland]

Yeah there's this guy on here with a photo of a road and a cloud shaped like a question mark as his avatar, I reckon he'd be the biggest dic... nevermind.

 

[freddy mercury]

Yep, it's pretty simple really. Doesn't mean it's easy, but it is simple.

I get paid monthly (end of month) and my biggest expense (home loan) also comes out monthly (mid month). I simply look at my balance at the end of each month and it's more than it was 30 days ago then I'm on on the right track.

In terms of practical savings advice it depends on your circumstances. As a student or full time worker in a low paid position it's always going to be harder to save than if you're a young professional with no kids, mortgage etc. If you want to put a plan in place to save $x a month you need to sit down and look at your incomings and outgoings and work out the differential and whether the former can be increased/latter decreased - then stick to your plan. I think people get sucked into the trap of spending more as they earn more just because there's more money in the wallet each week.

I've never set out a budget or decided not to go to the pub because I spent $50 the night before and that's enough entertainment for that week etc. My circumstances are probably similar to Caesar's and I agree that keeping living expenses down isn't hard if it's something you want to do.

Thanks mate you helped me the most. Just need a plan. I earn maybe 350 a week work casual. Gotta pay 50 bucks a week to my mum for board, 50 a month for foxtel. Those are my things I've gotta pay and my gym membership 25 dollars. My biggest waste is probably on the weekends where I spend maybe 60 bucks few beers after cricket and bit of dinner. Then after that money goes missing. How can I set up a plan to budget and save better. I put coins in a money jar at the end of each weekend.

I hope this makes sense.

 

[Lyyynnnchy]

geez get rid of the fox for starters. New digital channels are better in all areas ecept sport. Go to a mates house and watch the footy there.

I assume you're at uni/tafe full time if you're only working 15/20hrs a week. If so try and negotiate with your mum to pay less board. $50 a week for someone studying full time is a lot of money. Maybe if you can help out around the house a bit more instead of paying board. If you tell her its to help you save so you can get out of the house earlier she might be all for it!

 

[checkraiseulite]

You've got two real options here, bring in more money through increased hours/a better a job, or make some cuts so as to spend less. .

IMO you're far better off trying to increase the money coming in, whilst maintaining outflows. You only live once and you don't want to spend years 18-26 counting every penny and missing out.

Go to your boss and ask for extra hours, and constantly keep your eyes and ears open for other opportunities. You could also consider getting a second job, which aside from bringing in more cash can help you meet new people and expand your social circle.

Failing that, you're going to have cut out some discretionary spending. $350 ($250 after you meet your fixed expenses) is sfa in the scheme of things, so if you want to save anything significant per week you're going to have to be pretty savage with the cutting.

I'd look for a cheaper gym or workout at home, and I'd also get rid of foxtel.

Most importantly though, try and keep track of how much you spend per week and what you spend it on. Maybe make a note in your iphone everytime you spend money for a week or two to see where it's all going. My brother did this and found out he was spending $100+ on crappy food/drinks a week, these spending habits are what you're looking to identify and cut out.

Also, do not become that tight guy amongst your friends. Just because you're trying to save money, it does not mean that your money is more valuable than theirs. Don't try and freeload off them. It's not worth costing you your friendships, I've seen it happen.

 

[Pilchard_Adams]

You could get your pay split into 2 accounts

You could pay $100 extra tax a week, then come tax time you have over 5k saved

You could spend anything bar $2.00 coins and $10 notes, they go into a jar or money box. You would be surprised how quickly you save this way

You could make your current money work for you, buy from garage sales and resell on ebay for example. Or Auctions.

You could pay double board and ask your parents to hide the extra from you.

 

[Mr.X]

just be a mega tight wad

 

[sammm]

I always keep a separate savings account and deposite money in it when I get paid, BEFORE I spend other money. That way, I'm not just spending and then left with nothing to save. I know I've saved no matter what.

thats what i do. i have an automatic savings account set up with ING direct which takes out an amount every pay day. I then use it for emergencies, , holidays etc. i if i get a pay rise, i increase the amount per fortnight, if suddenly i have huge bills coming in i decrease the amount a little. in the beggining i started with only saving $20 per fortnight, then gradually i increased the amount.

 

[powerful girl]

keep a spending diary for one week, be honest with yourself and write down everything you spend money on, including those small items we tend to forget about that don't cost much at the time but add up, the typical things are, take away coffee, lunches etc, bottled water, iced coffee or cokes etc

Sit down at the end of the day and write down everything you have spent for the day and tally it up with what you started wth in your wallet that morning, don't use eftopos, just pay cash.

Once you have a week's worth of spending categorise everything and add everything up, reflect on how much you needed those things or if they were impulse buys, bought due to laziness (lunches) or bought due to lack of planning (take away meals etc) and work out where you can make changes. You will be surprised how much these things can add up to and eat into your ability to save. It is possible that you might be spending hundreds of dollars each pay on stuff you just don't need to buy.

Once you know where your money is going you can start assessing if that is how you want to spend it, by making a few changes you can allocate that money to a separate account, without an ATM card, and have it blocked from withdrawals - your bank can do that for you.

Happy saving !!

 

[Patrick Bullet]

The way I have always done it (successfully) is to work out a budget. Try to work out all of your unavoidable costs that you face over the course of a year (e.g. rent, food [groceries, not eating out!], car rego, insurance, public transport, electricity, gas, petrol, car servicing). Grab your old bills or look at your old statements and try your best to guess what you will need over the course of a year. Add it all together, then divide it by 26 if you get paid fortnightly, or 12 if you get paid monthly. I use Excel to do this. This is the amount you will ABSOLUTELY NEED to set aside from your pay (i.e. not spend on fun stuff) in order to survive. If you are able to resist spending this money on fun stuff, you can rest assured that you will never find yourself with a bill that kicks your butt unexpectedly. In my system, I call this money the Household Budget and it lives in its own everyday transaction account. When I pay bills, I pay them from this account. This works for me because if I think there's a chance I might go out and get drunk and want to spend money in this account on stupid stuff, I just leave the card for that account at home.

After that, work out about how much in a pay period (i.e. fortnight/month) that you feel you will need in order to have fun. I personally set aside $200 per week, but I'm half of a DInK household so this might be more than you want to set aside (in my student days, this amount would be closer to $50). I call this money my Fun Money and it lives in its own secondary everyday transaction account (i.e. on fortnightly payday, I send $400 of my pay to this separate 'Fun Money' account). When I go out to pubs, buy clothes, computer games etc. I use the Fun Money account. This Fun Money card goes with me when I go out.

The rest of my pay then goes into a high-interest saver (e.g. uBank, ING), which I don't touch.

This is probably me getting carried away here, but I also use Excel to keep track of everything that I spend in the Household account to see if my initial budget estimates were right. If they're not, then I change them and adjust accordingly.

It sounds like a lot of work, but almost all of the work lies in working out the estimated budget at the start - you only really need to do this once. If you're serious about saving, it's time well spent.

 

[Patrick Bullet]

Also, I'll tell you about one more 'cognitive trick' that I use to help me decide what to spend my fun money on. I always think about my fun money as being my reward for work. In my case, I work for 80 hours in a fortnight and give myself $400 Fun Money in that time. So each hour of work for me earns me $5 of 'fun'. When it comes time to decide what to spend my Fun Money on, I just ask myself how many hours do I have to work in order to earn this 'fun thing'? So, say a computer game I am considering is $50 on Steam. To decide whether or not to buy is, I ask myself, "Is this game worth spending 10 hours of my life at work for?" (or "is playing this game going to make up for the anguish I experience from 10 hours at work?" back when I hated my job) If the answer is yes, then I buy it, if it's no then I don't.

Following this logic, to earn myself:
- one pint of beer at a pub, I have to spend 2 hours of my life at work
- a burger and chips at Grilld', I have to spend 3 hours of my life at work
- a new jacket from Politix, I have to work 80 hours (a whole fortnight)
- a new pair of trendy shoes, I have to work 29 hours (almost a whole week)
- a return trip to Melbourne for a long weekend, I have to work 160 hours (a whole month)
- a movie in a cinema, I have to work 4 hours (6 with popcorn and coke!).

When you put things into these sorts of terms, you quickly realise how not worth it so many things are!

 

[Scotland]

Three separate bank accounts? Sounds a bit OTT IMO, but can see the reaoning behind the income splitting.

I have one account offset to an IO home loan. Everytime I get paid my effective principal goes down by my income amount then increases as I spend money for the month. Comfortably the most effective way of handling my banking. If I didn't have a loan and had cash I'd keep it all in a high interest account.

 

[Patrick Bullet]

It's even worse than you think! What I didn't mention is that my wife also has her own Fun money account as well as her own high interest saver plus we have another shared household account for salary sacrifice; unfortunately, we can't avoid that one (without doing salary sacrifice which is just too good a deal to miss). As long as we're not paying fees on any of them, I don't mind it, but could simplify it if I needed to.

 

[Hellgood]

I penny pinch, and also don't buy things unless it's a need. I'm 18 and have about $10,000 in my account, im not a huge fan of going out though, so I don't piss much of it away.

It's not all that hard, just spend money when you need to. There isn't a secret to saving, really.

Sounds pretty similar to me. But now I've just started up in the stockmarket, not exactly spending much, but still it's pretty nerveracking when you feel as if you are just throwing money away in the hope somehow more will come back.

 

[sabre_ac]

Best advice I recieved lately regarding spending (Which is saving) is that it's far better to spend on experiences than items, experiences remain with you a lifetime and often become better as you get older. Items give you a instant thrill that quickly becomes the norm and requires further expenditure to get back to that original thrill.

Best example I suppose is spending money on Holidays / Dates / Sporting events opposed to the latest Iphone/Computer/Clothes.

The other issue is we're all constantly told how much of a difference saving in your 20's makes later in life, which is definitely true. However I always remind myself you can't take your money with you and going on the most expensive cruise at 70 is hardly the same as backpacking through south america at 25.

 

[Ghostwriter]

Best advice I recieved lately regarding spending (Which is saving) is that it's far better to spend on experiences than items, experiences remain with you a lifetime and often become better as you get older. Items give you a instant thrill that quickly becomes the norm and requires further expenditure to get back to that original thrill.

Best example I suppose is spending money on Holidays / Dates / Sporting events opposed to the latest Iphone/Computer/Clothes.

The other issue is we're all constantly told how much of a difference saving in your 20's makes later in life, which is definitely true. However I always remind myself you can't take your money with you and going on the most expensive cruise at 70 is hardly the same as backpacking through south america at 25.

Good grief, that is the most ridiculous thing i've read on here in 10 years, buying an item is an asset, buying an experience is a buying thin air, shakes head and walks away.

 

[year of the roo]

Good grief, that is the most ridiculous thing i've read on here in 10 years, buying an item is an asset, buying an experience is a buying thin air, shakes head and walks away.

Agree to an extent. I suppose sabre is a travel agent, with an outlook like that.

Me, I like to have a bit of both. Call me crazy...