Posted February 2020 by Melissa Abraham-Smith
Clearing your path to financial freedom...
We know, sometimes sticking to your budget is easier said than done.
Separating necessities from luxuries, needs from wants, and must-haves from can-waits is tough, especially if you find yourself with a little extra spending money at the end of the week.
But whether you make a little - or a lot - today we're helping you manage your money with a list of unnecessary expenses you could cut to keep your budget in shape.
- Skipping expensive brand name products
- Cancelling unused subscriptions
- Getting impulse spending under control
Let’s kick things off…
1. Lottery Tickets
“You need to be in it to win it!”
While this might be true, throwing your spare cash at lotto tickets each week is a quick way to lose money. When you consider how many other people are doing this, the odds aren’t in your favour.
Before you know it, $10 here and $20 there quickly adds up. You don’t need to rely on a game of chance to earn more on what you make. Simply set that hard-earned cash aside in an emergency fund, term deposit, or savings account.
In fact, if you set aside $20 a week for a year, that’s a guaranteed $1,120 before interest.
2. Late fees
Have you ever missed a bill payment?
If so, chances are you were penalised with a late payment fee or penalty. Doing the best you can to pay on time is a great habit to get in to, and can be as easy as setting up automatic payments via your account so that they don’t slip your mind during a busy week at work or with the family.
Savings Tip: Many utility providers will often offer a prompt payment discount for paying early.
3. Buying branded products
Did you know that ‘budget’ brands are often just as good - if not better - than the ‘real’ thing?
It’s true! No-name products are often made in the same country and, usually, the exact same factory. That $90 tee you saw in an upmarket store? You could buy almost the exact same product for $15 from The Warehouse or Kmart (minus the logo).
You might not see a difference in the products, but you’ll notice it in your bank account!
4. Impulse spending
Ah, impulse spending.
We’ve all been guilty of finding spending money a little therapeutic from time to time. However, retail therapy can quickly spiral into impulse spending which could leave you in debt with a bunch of things you won’t wear, don’t need, or won’t use.
Impulse spending isn’t just limited to big-ticket items, either. When’s the last time you went to the supermarket and walked out with an extra block of chocolate or bottle of wine?
If you’re keen to stick to your budget, remove the temptation by:
- Leaving the credit card at home and only bringing the exact amount you need.
- Planning ahead and taking a shopping list with you the next time you buy groceries.
- Avoiding online sales or cheap deals on things you don’t actually need - despite the savings, you’re still spending.
- Not stopping for window shopping, as it can quickly turn into ‘Walk in the door and start shopping’ shopping.
5. Taking expiration dates as law
Taking expiration dates as the law can see you throwing out perfectly good food, and wasting money in the process. Remember, there’s a difference between ‘Best Before’ and ‘Use By’, so double check which is which before taking action.
Is the milk a day past its ‘Best Before’ but still fine? Then add it to your cereal! Peanut Butter still going strong a month on? Put it on your toast! Just be sure to use a little common sense when deciding what can stay and what can go. If the chicken expired a few days ago, you should probably give it a miss.
6. Extended warranties
If you’ve purchased electronic equipment recently, chances are you’ve been asked if you would like to purchase an extended warranty. While they may sound good in theory, they’re often expensive and unnecessary. In fact, you may be forking out for protection you’re already entitled to.
Nine times out of ten, your standard warranty is fine and you can pocket the savings.
7. Pre-sliced or individually packaged conveniences
Convenience tends to come at a cost. Those individually wrapped bags of chips, for example, might look great for school lunches, but they’re often more expensive and are incredibly wasteful. Just think of all the plastic!
Where possible, try and cut down on convenience products and do it yourself, instead. A large bag of chips or crackers portioned out into reusable containers isn’t just better for the environment, it’s easier on your back pocket as well.
8. Interest on credit cards
One of the easiest ways to clock up unnecessary expenses is interest on credit cards.
It’s all too easy these days to swipe your card without thinking about how high-interest rates and fees will affect you later on. To avoid high-interest debt, start leaving your credit card at home and only buy what you can afford. It’s easier than you might think.
9. Low-interest savings accounts
Managing your money doesn’t just mean cutting out unnecessary expenses, it also includes making the money you do earn work harder for you.
Every good budget should include a little extra that you can set aside for savings, so ensure it’s being put into a high interest savings account that incentivises the process and rewards you for the more that you save with compound interest.
10. Paying someone for simple fixes
Getting your hands dirty and doing a little DiY can save you hundreds.
Instead of paying someone to carry out simple fixes around the home or in the garage, take to Google instead. The internet is full of DiY Guides, How-To Videos, and Step-by-Step Instructions on how to do everything from replacing blown headlights to fixing the leaky tap in your kitchen sink.
11. Excessive subscriptions and TV channels
We’re increasingly busy these days, so it makes sense that we have less downtime.
That’s why it pays to revisit your monthly subscriptions like Netflix, Lightbox, or Sky TV and work out which ones you’re actually using. Paying for something you don’t use is the easiest way to throw money away.
Oh, and don’t forget to unsubscribe before those free 1-Month Trial accounts expire, too!
Scaling down your expenses
Separating luxuries from necessities and scaling down your monthly spend doesn’t have to be hard. With a few small changes here and there, you can make all the difference and ensure you’re well on your way to financial freedom.n