Five smart saving practises to make sure you never run out of money

Dec 27, 2022

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Building an emergency fund or saving for the vacation of your dreams is impossible without sound money management practises. The seven habits listed below, which include setting a savings goal, are shared by personal finance experts. The results of a Finder survey showed that 44% of Australians could only live off their savings for up to one month.

If you have any money in the bank, you are already ahead of the game, given that millions of Australians have little to no cash reserves to fall back on. Many Australians find it more challenging than ever to save money due to the double whammy of stagnant wage growth and rising living expenses, most notably housing.

You can increase your chances of successfully saving money by doing the following tasks in this article. The good news is that developing good habits for saving money can become second nature.

In addition to your long-term goals, such as saving for a down payment on a house, you should also consider your short-term goals, such as a vacation.

Make a savings goal and learn how to budget

Goal setting is the first step in developing good money-saving habits. Savers have specific money goals that influence their daily spending habits and choices.

Learning to budget is at the heart of any savings strategy. Budgeting allows you to prioritise spending and strike a balance between spending and saving over a year.

When you are tempted to spend more than your budget allows, your savings goals remind you of the future gratification that awaits you, making it easier to stay focused and resist temptation.

Examine your electricity and gas tariff plans

Reduce your energy bills by switching from hot to cold water washes, switching to more energy-efficient light bulbs, turning off appliances that use a lot of standby power when not in use, and purchasing energy-efficient appliances. Also, it pays to compare AGL energy plans and to make a switch as soon as you find the right deal for you.

Clear your credit card balance

It is easy to understand how impulsive credit card purchases can jeopardise even the most modest savings objectives, with Australian credit card interest rates reaching 25% or higher. The best way to avoid interest charges and late fees is to pay your credit card in full and on time.

You should also pay more than the minimum required, or you will end up paying a lot more in interest.

Make a meal plan

Planning your meals and grocery shopping is one of the simplest ways to save money. There will be no need for random trips to the supermarket if you know what you will be eating for the week and shop accordingly.

Extra visits result in more spending and even food wastage. Buying all your staple items at wholesale stores will make it even easier to stick to your budget. Doing one bulk grocery shopping per week rather than several smaller ones will help to reduce impulse purchases, takeout, and waste.

To achieve one grocery shop a week, you will need to make preparations in advance, such as writing a weekly meal plan so you can shop for everything you require in a single trip.

Pay your bills on time to avoid late fees

Paying your bills on time is a great way to keep your credit history clean. You will also avoid paying interest and late fees. These late fees can add up quickly, especially if you use ‘buy now pay later’ services, which may not charge interest but can slap you with fees if you pay late.

If you are having trouble paying your bills, consider setting up a regular repayment amount to balance your cash flow. Customers who pay on time may also receive a discount from some energy providers. You may also be able to save money by paying in advance or by purchasing in bulk.

Wrapping up

Saving is not just about the money; it is about the options represented by a cash safety net and managing your money to achieve the type of life you want to live. Although happiness may not be something that can be purchased, having more options gives you the freedom to have bigger dreams. Follow the advice in this article and watch your savings grow.

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