7 tips guaranteed to put more money in your pocket
We’ve all read the budgeting advice that tells us the only way to save money is to trim all the fat from our spending. The key to wealth, we’re told, is to give up our morning coffee and our magazine subscriptions and to start taking our lunch to work in a brown paper bag.
But surely the point of saving is to let us live the lives we want, not to sap our lives of everything we enjoy. That’s why we’ve developed these tips for saving money without sacrificing your lifestyle.
1. Think big
Why focus only on cutting the small things when there’s room for bigger savings by reducing our big expenses. And, for most of us, there’s no bigger expense than the home loan. In fact, the average Australian now dedicates a third of their gross salary just to meeting mortgage payments. By switching to a bank with a better deal - or negotiating a lower rate with your existing bank - you can make a real difference to the amount you have to outlay each month.
To make the most of your offset account you can use it in combination with a credit card for your day-to-day purchases. When you leave money in your offset account and pay the card off in full right before the due date, you’ll minimise your interest repayments, pay off your home loan sooner and save more.
2. Think small
While you’re negotiating down your biggest expense, why not complement it by saving your spare change? Savings app Digit checks your spending habits and takes a few dollars to save if it’s available. While the Raiz app rounds up every purchase you make and invests the difference in a diversified portfolio. Over time, you should notice a nice nest egg starting to grow without feeling any pain at all.
But don’t just tackle the savings end of the equation. You also need to make sure your spending and saving philosophies align.
The 50/30/20 rule says that, ideally, 50% of your money should go on essentials like housing and electricity and 30% should go towards lifestyle, like gym memberships and food (yes, it’s lifestyle too). The remaining 20% should go towards savings or paying off any debt you might have.
These ratios are just suggestions as everyone has different values, but once you calculate an equation that works for you, it’s easier to see where to trim the fat.
For instance, if you find that 40% of your pay cheque is going towards takeaway food, you need to get organised with your groceries.
3. Make your work, work for you
One of the easiest ways to put more money in your pocket is to make sure more money comes in. And, for most people the obvious way to do that is through a pay rise.
But asking for a pay rise isn’t easy. You’ll have to make your case by looking at other comparable salaries and justify your worth as an employee. But, even if that still leads to a ‘no’ you’ll at least have a better idea of what needs to be done to secure a raise in the future.
There are other ways your company can help you without upping your pay. They may be open to paying for the training courses that will get you that raise next time. Alternatively, your boss may be willing to put you in a better financial situation with limited impact on their bottom line, by letting you salary sacrifice a car or your super.