One of the most common New Year resolutions is often saving money for some major goals like a home deposit, getting out of debt, applying for that visa, getting married or starting a family.
If you have a major financial goal to achieve this year, here are a few ways you can do it.
Track your spending because ‘little stuff adds up over time’
The core principle of saving money is to be aware of one’s income and spending. While many are aware of how much comes into their bank account, not many people keep a track of where their money is going.
Check your credit card statements, bank statements, receipts to figure out how much you are spending on your rent/mortgage, food/groceries, entertainment etc to work out your regular expenses and optional expenses.
This helps in realising which are avoidable expenses, says Paridhi Jain of Skilled Smart who helps Australians gain financial literacy.
“As annoying and cliché as it sounds, the little stuff does add up over time. So, it’s really important to be mindful of what spending habits you’re developing. There’s a difference between buying something as a one-off purchase and developing a ‘habit’ of buying that thing on a regular basis,” Ms Jain told SBS Hindi.
Try out Money Smart’s smart budget planner.
Change your habits
Buying a snack on the high street when hungry?
Picking up a latte from the café in the office every morning?
Parking in the CBD to get to work every day?
Australian Securities & Investments Commission’s Money Smart advises making small changes in your life to help you achieve your money goals.
‘Change one habit and save’, it says.
‘Small changes can make a big difference to your bank balance. Change one thing you do regularly and you could save money,’ Money Smart advises.
Some examples are:
- Give up drinking coffee or cut down on alcohol - it will save you money and can have health benefits.
- Make your lunch at home and carry snacks in your bag.
- Borrow books and DVDs from the library.
- Lock up your credit card for a month and only pay for things with cash.
Check out other money-saving tips here.
Have a strong motivational goal – a burning desire
21-year-old Henry Serfontein has set himself a goal to bring his mother to Australia.
He needs $50,000 to help fund the contributory-parent visa for his mum.
“My mum’s visa is my key driving force, but once that’s achieved, I plan to put funds towards studying and starting to invest. Having that goal has given me a lot of focus and clarity, so I’m a lot more mindful of how I spend my money because I know that every dollar I spend is a dollar away from that goal,” he told SBS Hindi.
Having a strong goal helps in your endeavours to save money, says Ms Jain.
“A common mistake that people make is saving for the sake of saving, instead of saving towards a specific goal,” says Ms Jain.
“People who have a goal they really care about are much less likely to give up and more likely to go above and beyond to achieve their goal.”
Find innovative ways to earn more
“A lot of ‘saving advice’ focuses on cutting down expenses, and although this is important there is a limit to how much you can cut back,” says Ms Jain.
“If you cut back too much, you’ll start to feel deprived and it’s not always sustainable. Luckily, it’s never been easier to make some additional money on the side of your regular job!”
She herself tried this out in 2019 and challenged herself to ‘save an extra $1,000 in 30 days’.
She decided to declutter her home and turned to Facebook Marketplace to sell her second-hand stuff.
Within 30 days, she’d made $775.
“It was a lot more fun than depriving myself of eating out!” she says.
50-year-old Jacqueline Gardiner also found value in selling her second-hand items.
“I cleaned out my storage and sold $500 worth of things online. I even found some stuff at work that my employer was going to throw out, and he didn’t mind me taking it home to sell it! I’m more aware of little opportunities now and am seeing them everywhere,” says Ms Gardiner.
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Disclaimer: We’d like to point out that the information contained in this segment is general and is not specific advice. If you would like accurate information relevant to your situation, you should ask a financial planner.
