“Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt."-Henrik Ibsen
1. Revise all your bank statements and receipts
If you take an honest look at your bank statements you are going to be staring the cold hard truth in the face. Keeping receipts from cash purposes will allow you to see where all those sneaky bank notes and coins are disappearing to swell. Imagine if you realised you were buying four take away coffees a week at $5.00 a pop. When you add that up it's $780 per year worth of coffee! Might be time to buy an expresso machine and start taking them to work in a reusable cup instead.
2. Income vs Expenses Table
Putting everything in to a clear spreadsheet is going to help you work out what your financial position is. Whether you are saving, making ends meet or completely sinking in debt. This is the most important step in cutting through the financial denial.
3. Cut back on expenses and create a savings plan
Look at the categories where you are spending the most amount of money. It is on fuel, food, car repayments or something else? It's time to consider how and where you can cut back on these particular expenses. You might try to find the cheap day you can fuel up your car or start comparing different financial products so you can reduce interest on your loans. You also might decide to give up one or two things completely for a period of time such as take away lunches or a bad habit such as smoking.
4. Implement a budget and savings plan
When putting your new budget together having your fixed costs direct debited will help you because you only have to control a smaller amount of money and no bills will get forgotten. Direct debits might include your major payments such as rent or mortgage but you can also divide up your average amount spent on utilities each quarter into regular monthly repayments to avoid having to find lump sums of money at the end of the quarter.
Make sure that you include "play money" and funds for an emergency into your budget otherwise it is unlikely you will stick to it if it's too strict. A great way to keep track of your budget is to use online budgeting tools and apps. There are lots of them around and a lot of great ones are free so do your research and find one that works for you.
It will also help if you write yourself a mission statement to keep on track. Post it on your bathroom mirror or fridge or even save it as the lock screen on your phone. Your mission statement should include something personal to your struggles with money and motivational like "Until the new financial year I am not going to spend any money on shoes. I have plenty in my wardrobe and they will get me through until then."
5. Re-Organize your Wardrobe/Pantry/Fridge
Having a clearly organised pantry fridge and wardrobe will make sure you are really clear on what you already have in stock and prevent you going out and buying things you don't need, saving you a tonne of cash over the course of the year. Knowing what foods you have to work with will also help you effectively menu plan your meals.
Decluttering your wardrobe can also give you the opportunity to sell items you no longer need and inject some extra cash into your savings. It will also save you some stress trying to find outfits for each day. Try hanging similar items together or pieces that go together and face all your coat hangers the same way to keep even space between items.
6. Check your car tyre pressure
Having incorrect tyre pressure can increase wear and tear on your tyres as well as reduce fuel economy in your car. Also ensuring your car is regularly serviced will keep it running at maximum potential for longer.
7. Menu plan your meals to last between pays
Write a list and stick to it so there is no food wastage or impulse buying. You could also order groceries online and have them delivered to avoid impulse buying. Try having a no spend week using only what you have left in your home. Google recipes for culinary inspiration and try sites such as Super Cook or Recipe Key for ways to use what you already have.
8. Buy and cook in bulk dividing up your meals into freezable meal sized portions
This is especially good for soups, casseroles and curries. Have a look at local wholesalers, farmers markets and junk mail to find the best deals in your area. A good tip is to go not long before the market closes when the farmers are discounting all their stuff to get a quick sale and avoid packing up their produce.
9. Get to know your discount buying sites
Groupon,Scoopon and Living Social are all fantastic sites but there are plenty more. Save big on holidays, dining out, and more. Just sign up to the newsletter for all the current deals available in your area.
10. Pay your bills on time
Not only do you want to keep on side with your providers, paying your bills on time can earn you some serious discounts, especially in your utility bills. If you are in Australia you may also be eligible for further discounts if you are a senior or hold a healthcare card.
Another reason to pay your bills on time is to avoid late fees. If you paid every power bill late for one year with a fee of $30 you could be wasting $120 each year just in late fees plus you won't be getting the discounted rate possibly wasting you another few hundred.
11. Find unclaimed money
If you have had a colourful employment history, chances are you have had several different superannuation accounts. This could mean that you have unclaimed super sitting around just waiting to be collected. It's important to get hold of this money and move it all into one account so you are not paying multiple administration fees on each account wasting thousands of dollars. You also want your money to be totalled so it can be invested properly and you can be earning interest on the cash amount instead of minimal interest because its all in separate accounts.
To find out if you have any unclaimed super as well as any other unclaimed money from bank accounts and more, do a google search for "find my money." You can try organising to put it all in to one account yourself or appoint a financial advisor to do it and set up your superannuation to what level of risk you would like it operating at.
12. Re-evaluate your lifestyle
You probably have a lot of things in your life that are "wants" rather than "needs" or maybe you haven't even considered the impact they are having on your finances. Do you really need the big petrol guzzling car or could you sell it and get something more fuel efficient? If you are spending a significant amount of your paycheck money on wine or massages to wind down from your high stress job or childcare to cover your ridiculous hours, it might be worth thinking about a career change, position change or company change.
13. Be smart with utility consumption
Switching off appliances at the powerpoint can save you several hundred dollars a year on your power bills. Also consider having energy efficient appliances. There is nothing worse having a cheap appliance that is costing you a fortune to run. Ensuring fridge seals are properly attached and heaters are regularly serviced will also save you money (and potentially your life) in the long run.
14. Get any leaking taps fixes
It may be a drip (no pun intended) but it all adds up at the end of the quarter. Familiarise yourself with other water savings tips to reduce your bills.
15. Make extra repayments on any loans where you can afford to
With your home loan even most fixed rates will allow you to pay up to a certain amount extra to assist in reducing overall interest. Use your banks online extra repayments calculator to find out what you can save in interest and how many years you can potentially knock off your loan. A little goes a long way on a loan that size. Make sure to check that you have a penalty-free redraw facility so that if you suddenly need that extra repayment back in your account for an emergency you can get it.
17. Learn to say NO
It's often hard to save when you have continuous offers of birthday parties, nights out on the town, or you are desperate for a holiday. These are only short term issues and a week or two later will be forgotten about. There is nothing wrong with being honest about your situation and real friends will appreciate that you are being smart about your money rather than cheap. If you can have some discipline short term you will be able to afford the important things long term.
18. Share your home with others
It's a daunting thought for some people but all in all its hardly ever that bad providing you start out the right way. There are plenty of sites such as Gumtree, Easy Room Mate or Share Accommodation where you can find potential roommates. These sites allow you to place an ad of what you are looking and not looking for in a potential housemate. Don't worry too much about hurting feelings, problems will only flare up later on and the communication lines are likely to break pretty quickly if you are not honest about your expectations from the beginning. I have done this over the years and had only had the odd one or two difficult housemates out of the thirty plus people I have shared with.
Heard of the saying 'your trash could be someone else's treasure?' It could just earn you some extra dollars to use somewhere else. Try selling on places like Gumtree or trash and treasure markets or you could hold your own garage sale. Just make sure you advertise well ahead of time and use clear signs to get people in.
20. Refinance Your Credit Card
If you have credit card(s) with money owing, look into rolling them over on to another card with a lower interest rate. This is known as a balance transfer. You can save money by having a period of time in which to make repayments at the lower interest rate.Compare rates online and make sure you cut up the original card to avoid the temptation to rack up purchases again. Take advantage of moving your balance over to a lower interest rate and pay it down as much as you can in that period. Once they are at a zero balance, if you can live without them, do.