Wednesday 15 April 2015

How to Save Money

Hey everyone. So today I thought I would make a post on how to effectively save money. These days I think way too many young people have no idea how to save their money. I have way too many friends and know too many people who are always complaining that they only have $20 left in their accounts and "can not wait until their next pay so they can go and spend their money". I'll give you a brief overview of my working life & savings habits and then share some of my best money saving tips I have! 

Working Life Overview
  • Pre-working life (under 14 years old): 
    • Typically got money off my mum every now and then when I asked to go to the movies or something
    • Other than that the money I got came from birthdays, christmas and doing chores for my mum or my aunty. 
    • I used to always try and go by the "save half and spend half" rule
  • First job (14-15 years old):
    • Worked at McDonald's
    • Wasn't very good at saving lots of money
    • Would save for short term goals, i.e. concert tickets
    • Mum used to make me save at least $20 each week from my pay into a savings account
    • Having a key card was a bad idea: I didn't pay attention to what I would spend
  • 16-17-start of being 18/the remainder of high school
    • Didn't do 'formal' work
    • Money came from babysitting over the years
    • Saved all of that money to spend at schoolies (didn't spend it all- bonus)
  • Post-high school/uni student life
    • Became a workaholic
    • Focused on the future
    • Saves more money than I spend
    • Got a job straight from school and have worked there ever since
    • Each summer holidays I get an extra job (e.g. Christmas casual job and a seasonal theme park job)
    • Work as much as possible during all holiday breaks so I can ease off a bit during uni time to study and focus on the uni work
So that (in very basic terms) sums up my life to do revolving around working and saving habits!


Top tips for saving money
1. Make a budget and stick to it-
So most of you who work will have a rough idea of how much money you are going to make every week. You need to plan ahead the things you need to pay for (and when) e.g. petrol, car insurance, phone bill, groceries, rent etc. Write up a budget including how much these things cost and decide how much money you will put towards them (weekly, fortnightly etc.)

2. Have an everyday account-
I get paid into this account so this is where I spend my money from. It is easy to spend all the money once it is there, which is why I keep limited funds available for me to spend and transfer the rest to different accounts (see below)

3. Have a savings account, with a good interest rate-
Easiest way to save money. When you get paid, it is always a good idea to set aside a certain percentage of that pay and put it into savings. Another way I find it easy to add to a savings account is each month on a certain day (for me it is the 5th, no idea why) transfer a set amount of money directly to savings. It is best to do this after you have your set budget so you won't put too much money in this account that you need to withdraw it. Having a good interest rate on a savings account that you don't touch will allow you to accumulate extra income in interest. Easy money right?

4. Open a third account when there is something big you want to save for-
So this is one that I started recently. So you have an everyday account for expenses, a savings account that you don't want to touch, but what happens when you are saving for something in the near future? Open a third account to save for those things. Add this figure into your budget and that way it won't harm your savings earning interest and it still allows you to set aside money that you won't use until you have enough for your goal. At the moment I have an account that I am saving money up to spend on my overseas holiday at the end of the year. And because I know that is what I have set it aside for, I will not touch the account until it is time for that holiday!

5. Withdraw the amount of money you will allow yourself to spend for the week-
This is super useful for some people. Dealing with monetary transactions instead of credit/debit cards will a lot of the time make you more aware of the money you are spending. For example, if you want to allow yourself $50 flexible spending money for the week, you will track your purchases better than if you were just using a debit card to buy things. I want to buy a shirt for $20 and see a movie for $18. You are aware of what you will spend in cash. Then you buy popcorn because you know you still have a bit of money. This is easier to notice when you look in your wallet, instead of buying two shirts ($40) and going to see a movie with popcorn ($25) and before you even realise, you already went over your budget for the week. This brings me to my next point:

6. Have a money tin/change purse-
This is the most useful way for collecting change. I used to just throw all my coins in the bottom of my handbag or leave them in my car and you would honestly be so surprised at how much money in change you just forget about. I have a money tin at home and whenever I have loose change, I put it in the tin. Same could work for a change purse!
My money tin. Meant to be funny because apparently I swear too much. Either way it has a
decent amount of change in it so I can't complain lol
7. Use a PayPal account for online purchases-
So I know a lot of people out there love online shopping. I am one of these people. I used to just spend money like crazy on my online purchases when the amount would be withdrawn from my account I wouldn't realise how much I was spending. This is why it might be a good idea to use a PayPal account and put a certain amount of money in the account that you are willing to spend. This will help you keep better track of your purchases and it is a more secure form of spending money online (bonus!)

8. Other small things-
Other advice I would give is remember that you don't need to buy everything! Fashions change, you get tired of video games and having the most expensive things isn't a reflection of you as a person. That's not to say don't splurge on things you want sometimes (I certainly do once I feel I have earned the right lol). Just don't be silly with money, I know you can always make more, but at what expense? What will you have to miss out on because you need to earn money for petrol just because you needed to buy that shirt that you already have 4 other colours of?

I am a firm believer in working hard and saving hard to get what you want. Things don't just get handed to everyone. These are just some of the things I live by in order to not panic about whether or not I can buy food or fill up my car with petrol. I am lucky in some ways that I am able to work and that I can study and I know not everyone is that lucky. I didn't make this post to offend anyone, even if only one person out there finds my advice helpful, than I will be happy.

Thank you for reading, I would be 100% open to any suggestions or advice you have to give me yourself!
Until next post,
Stelle xx

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