I had to learn how to manage my money quicker than most people my age. I left home at age 16, started studying full time at age 17, moved to another country by myself at age 17, then moved to a new city again a year later.
I havent had parents I can just ask for money from. I started buying my own clothes at age 14-15, I had two jobs at high school and saved up to buy my first car working in a fast food restaurant. Everything I own right now I have had to purchase myself.
I have had my fair share of hard times already and had to learn quickly what works and what doesn’t. Now at age 20, I think I have a lot of useful advice that you could use to avoid making the same mistakes as me.
1. Think of hourly worth.
When you are about to make a purchase, think to yourself how many hours you had to work to pay for that. If you are on minimum wage it is likely you worked 4-8 hours just to afford that one pair of shoes you are about to buy. Is it worth it?
2. Savour things and experiences.
On the odd occasion when you go out for dinner or go on a trip/holiday, make the most of the experience and appreciate it.
3. Think of time off as lost money.
So you want to take the afternoon off work to go to a football game, or take the day off for a birthday party, or just to have a ‘sick’ day because you don’t feel like going in or you are hung over.. How much is it actually costing you? It’s not a purchase you are making that is costing you money, but it is ‘opportunity cost’, which is the loss of income when an opportunity was not taken, or in other words – what you ‘could have’ made.
4. Be careful of small expenses.
Things like a cup of coffee, or breakfast/lunch you buy on your way to work may not cost a lot at the time, but when you add it up at the end of the month, it can turn out to be a very expensive habit!
5. Focus on the future instead of getting satisfaction in the present.
Focus on the end goal and keep it in your mind every single day. Break it up into smaller accomplishments to keep you motivated.
6. Don’t buy unnecessary things to make an impression on people.
It’s not worth it in the long run. Make sure you do things for YOU.
7. Try to increase your income.
Ways you can do this are picking up more hours at work, getting another part time or weekend job, starting a side hustle, selling items you no longer need or use, starting a blog, getting another job with a higher salary or asking for a raise, create a product to sell, busk, become a mystery shopper, or rent out your car or a room in your house.
When you do find a way to earn extra money that works for you – SAVE THE EXTRA.
8. Automate your savings accounts.
This has helped me HUGELY. Create a goal – For me it was to pay as much of my school fees off as possible while I was working in a city for 5 months. In my bank I could set up whether I wanted to save 10% 20% or 30% each week via automatic transfers. Save as much as you can afford. If you want to put away even 40% or 50% you can start up a second savings account so it remains automatic, then you don’t have to think about it or touch it.
You can change your savings account so you can’t touch it, or so you have to call the bank to do a transfer (in emergencies) which makes it less likely for you to access the saved money.
Calculate how much you need to save, then divide by how many weeks, months or years you want to achieve this by so you can see how much you need to be putting away. This makes your goal measurable and shows you what to expect.
9. Create a visual reminder of your debt or savings goal.
This can be a chart on your wall that you can cross off every time you get closer, an app on your phone, or a pie chart (it’s offered in my online banking app) to show you how much you have left to go.
10. Make DIY gifts instead of store brought items.
11. Wait before making a purchase.
Set an amount of time that works for you before you actually purchase an item, this can be a week or a month, depending on the person.
For example you find a new outfit you want to buy. If its online, SAVE THE TAB. Wait for a period of time and the urge may pass. You may think actually you already have something that looks similar, or what occasion do you have to wear it for, or you may decide the item will end up sitting in your wardrobe for months without being worn! In that case you can move on, without regretting a purchase.
This method also means that things you do buy, you will REALLY like and appreciate, and they will hold deeper meaning to you.
12. Make larger portions of food when you cook.
You can freeze the extras, or eat it over a few days. This not only saves you a MASSIVE amount of time from cooking and planning meals, but you will need fewer trips to go to the supermarket, and buying in bulk is usually cheaper.
13. Pack food for road trips.
I am a sucker for this! Something I still need to work on.
I do a lot of driving between 3 hours to 5 hours and I tend to get hungry, resulting in me stopping at Mc Donalds for a cheap burger or buying a coffee to help keep me alert and fill me up. This is not only an unhealthy choice because it is hard to find nutritious fast food stores, but the small cost of a burger here and there adds up!
I am going to aim to keep snacks in the car such as nuts, or pack sandwiches before I go, as well as a bottle of water to avoid temptation.
14. Make changes to your lifestyle.
You don’t need to upgrade to the latest mobile phone or the latest car every time you start earning more money just to keep up with others or to show off. If you have debt to pay off, or want to save for something big like a holiday or a house, you need to live below your means.
15. Cut expenses.
This is one easy way you can start taking action immediately!
Cut off television, make your home energy efficient, run a fuel efficient car, find cheap or free hobbies, making dining out a ‘treat’, go on a cheaper phone plan or make your coffee at home instead of buying it every morning.
I love this post from The Simple Dollar – a site which I regularly refer to which has helped me in many ways.
What has helped you the most to save money? Leave a comment 🙂
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