I had to learn how to manage my money and support myself much quicker than most people. At age 16 I had left home and was working two jobs while I was at high-school, saving for my first car and buying my own clothes etc. I moved to a new city at age 17 to start my degree, and went on work placements all over the country every 6 months to get experience in the industry. By age 21 I had completed my degree and had kept up 2-3 jobs at all times whilst I was studying full-time, to pay for my school fees, afford a roof over my head and food in the pantry.
I have had my fair share of hard times. I have lost count how many times I have had less than a dollar in my bank, had to go $2000 into overdraft when it was quiet season at the hotel I was working at for my placement, and got my car stolen when I was visiting another city, leaving me stranded for a week as I couldn’t afford to get home. I started tracking every dollar I spent at age 18, figured out debt payment plans, and learnt to live off the bare minimum for years on end.
15 Money Saving Tips I Learned The Hard Way
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 it. I once read a book where it spoke about ‘life energy spent’. Say if you are on $15 an hour after tax, if you buy a pair of shoes, how many hours of life energy has gone into acquiring that item?
2. Savour things and experiences.
In all honesty I probably only dine out or get takeaways once a month. When I do decide to go and meet a friend for lunch, I make an effort to try a dish I have never tasted before and I aim to make the whole experience as memorable as possible. I wouldn’t go out and spend money on an item of food I could make at home. At least if it’s something new I am trying, I will remember and treasure the experience.
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! When I started tracking my spending, I knew I only spent $3 on snacks or coffee occasionally when I was in town. But that was actually adding up and costing me $70 a month! Now that’s a lot when you’re on a student budget.
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. One of the things our generation struggles with the most is instant gratification. We have access to ANYTHING with the click of a button, through our smartphone right at our fingertips. We no longer have to wait for things, we can get our purchases delivered to our doorstep, we can get payment plans so we no longer need to save up for the things we want. This is a HUGE problem and our spending is getting out of hand.
You could almost call it emotional spending. If your friend has something flasher than you, you will get one too so you don’t feel as if your missing out. If you are feeling down, you do some ‘retail therapy’ to improve your mood. If you learn to wait before making a purchase, after a couple of weeks you may actually realise you don’t want that item anymore which will save you on filling your home and wardrobe with unnecessary items.
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. I’m 21 and I still drive the first car that I brought when I was 16. It’s done over 250,000 kilometers, and it has scratches and dents on it from when I was learning how to drive. People say “wow, are you still driving that thing”? My response is “yes, well I need to get some of my debt paid down first”. I’m still planning on driving it for another two years! It’s all about priorities.
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 university 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.
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.
Visual reminders can include things like a debt tracking app on your phone, a chart, photos on your wall of your dream travel destinations or home that your saving for etc.
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 I already have something that looks similar”, or “what occasion do I actually have to wear this for”. 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.
12. Make larger portions of food when you cook.
You can freeze the extras, or eat it over the following 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 have put so much money down the drain whilst doing long road trips, because I got hungry and thirsty along the way and wasn’t prepared with my own snacks. I did a lot of long trips while I was studying, in a long-distance relationship, and was travelling to see my family halfway across the county. Next time you are driving long distances, pack healthy food items such as nuts, crackers, sandwiches, a smoothie, a roast veggie salad or bliss balls.
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. Find out how here.
15. Cut expenses.
This is one easy way you can start taking action immediately!
Cut off television and switch to Netflix, 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. These are just some examples of things that can add up quickly without us realising. Lifestyle inflation is a huge problem where we think we need the latest gadgets and the newest car, but where is it really getting you?
What has helped you the most to save money? Leave a comment below 🙂
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