Over the last couple of years, I’ve slowly learned some best money saving tips that helped me feeling finally being in control.
Growing up, I never learned any money management skills. Perhaps that’s because I never had any money to manage until going to another city for college. My mum was in control of my life and I never had any pocket money being a child. All red pocket money given to me on Chinese New Year day was handled over to my mum. Having an extremely controlling mum made me want to escape so much. As a result, I left home as soon as it became possible.
Living away from home since the age of 18 didn’t really help me to manage money money better. I simply spent whatever I had and enjoyed the freedom. Over the past decades, I’ve made many splendid money mistakes. Then one day, I woke up from my financial coma and decided to learn.
Here are the best money saving tips I’ve learned that actually work:
Get as specific as possible when it comes to creating your money goals.
Firstly, you need to know why you want to save. Be specific about your goals. Write them down and review your progress review regularly.
Start to track all your expenses and analyse them
Transforming from a non saver to a saver, you need to start to track all your expenses. You must know where did you money go. Analyse what you spending on exactly. How much of your spending is in relation to your fixed costs? Fixed costs are those expenses that you can’t avoid, such as housing, utilities, food and basic clothing.
Now, let’s think about how to cut other expenses and start saving.
Keep your emotion separately from spending
Unfortunately I’m a naturally very emotional person. So I get inspired, sad, motivated very easily. I’d spend $800+ easily to get some new work clothes before a work trip, trying to get a new job. Every Christmas parties, weddings and gatherings I go to would trigger some new clothes spending. When I’m sad, my already big appetite increases dramatically. I’d get all expensive meals to cheer myself up. Being inspired quite often means I’d also rush out to buy new gears and equipment will soon loose my interest the new subjects.
In order to be able to save, it’s a must to keep emotions separately from spending. Do not spend impulsively because you are emotional. Simply put, just don’t buy anything when you are emotional.
Leave things in the shopping cart for at least two days before committing to purchase
It’s ok to buy yourself something nice. But is that something you really want and like it for a long time or is it just something you want for this moment? Will you still want to buy them after the rush of blood over your head cool down? Before buying anything you want, leave them there for a couple of more days. Very often, you’d find you actually no longer want them any more.
I had hundreds of pair of silver earrings. They are all nice and I liked them before I bought them. However, I hardly wear any earrings and can’t name a favorite pair out of all those pairs. The money spent on those forgettable pair of earrings could easily buy a pair of classic Cartier earrings that will last forever and appreciate in value over time.
This leads to another point:
Invest in quality jewelry and accessories
I used to buy pretty looking handbags made in China. Lots of them. Sadly they only looked like handbags but would fall apart after a few usage. Until one day I discovered Louis Vuitton. They cost more to buy one but would last for a life time. The thing is, you don’t need to use them for a life time unless you want to. You could easily sell them after using them a few years without loosing money because Louis Vuitton retain their value really well. I sold this Louis Vuttion Neverfull bag after using it for 4 years for more than what I paid in Louis Vuitton Paris store.
Likewise, my gold jewelry bought 20 years ago has gone up in value.
Check at home if you’ve already had an item before rushing out to buy a new one.
To use a simple example, I have at least 3 scales. Of course hardly any one is ever being used, but whenever I felt the urge to loose weight, I’d buy a scale. Such examples are countless. Though such things are not that expensive individually, small expenditures do add up. So you can imagine how much money would have been saved if no duplicate purchases were made.
Do your research before buying something you really need
Check product reviews and do property research before buying some you need. If you need a gas heater in winter, buy a good one that will last and make you feel comfortable and happy at home.
Don’t rush out to buy the first one available but regretting the purchase after while.
Sometimes, you can find a cheaper but good alternative
Cheap price should never be your priority of purchase anything. Cheap price and good quality should be. A while ago I arranged the furniture at home and really wanted a floor lamp for the living room. Then I went online straight away and found this antique looking lamp for close to $300. Sure, I liked the look and there’s nothing wrong with it. But by then I’ve learned more from my more practical friends and am less vain. Eventually, this $12 floor lamp was bought for and I couldn’t be happier ! The light bulk was found in one of my cupboards so there was no need to buy new ones to go with the lamp. I could rate this as the best purchase ever and who could have thought I’d ever be so happy with so little money spent.
Unsubscribe newsletters from retail stores
I hardly voluntarily sign up on any newsletter. But those stores do not wait for your permission anyway. So you’ll get lots of lots emails everyday. Therefore it’s easy to just browse and buy something. Since they offer free shipping for spending more, why not just get a couple more things. You saved on shipping fees right? Right. The best approach is unsubscribe whenever you receive one of the newsletters. Out of sight, out of mind.
Build a capsule wardrobe and only buy clothes that you will wear over and over again
Have you ever opened your wardrove full of clothes and still felt there was nothing to wear? I bet there’s something in your closet colleting more dust than others. Very often we just keep wearing those old favorite again and again. So much money is wasted on buying something you actually never wear.
Steve Jobs and Mark Zuckerberg buy the same clothes in dozens to avoid decision fatigue. We could build a capsule wardrobe to save money.
I recently heard someone saying if you don’t think you’ll wear something for more than 30 times, don’t buy it. That totally blew off my mind. What a genius way of saving money and why didn’t I hear this advice earlier? Do you really need 30 different pairs of boots? No.
Plan a spending freeze
Like mentioned above, find out what your fixed costs are. Most likely, the list goes like something like below:
- Housing and utilities
- Travel costs to work
- Phone and internet
- Private health insurance
If something don’t fall into one of these category, don’t spend money on it.
Review your fixed costs and see if you can find a better deal elsewhere
Are you happy with your current mobile plan, internet service, private health insurance, home mortgage? Probably you are. If you are on a mission to save money, shop around to see if you can find a better deal.
Use credit card to your advantage
Credit cards may have a bad rep. But as long as you don’t have a credit card debt, you can totally use the credit card reward points to your advantage. Because many credit cards offer cash back rewards, so you can save money paying your fixed costs by credit cards instead of using cash. Make sure to check credit card statements frequently to make sure you are charged correctly. Also, it’s very important to pay your credit card on time every month to avoid interest and late payment charges.
If you have items you no longer use, try selling them instead of just letting them collect dust in the corner
With the Covid lockdown going on for months, it’s difficult to go out. Instead, you can stay home and declutter. If you have nice things that no longer in use, why not try to sell them online in your spare time. Online shopping is going hot at the moment. So is online shopping for high quality second hand items. Here are some best venues you can sell your clothes online in Australia.
Set up automatic payment plan every months to avoid late payment charges
I never had money problem paying off my credit card on time. But due to my sloppiness, very often I forget to pay it on time and was charged late payment fees. It took me a few years to finally set up a direct debt plan to let the payment taken out from my bank balance every month. Problem solved. I also set up direct payment payment plans for all my utility bills so late payment fees are rarely happening any more.
Don’t spend your pay rise or tax refund, invest it
If you get a pay rise, use it to bulk up your retirement fund or savings account. The same goes to your tax refund. I used to shout on dinner or lunch on a large group of my “friends” whenever I got a pay rise or bonus because I simple had to find ways to spend. It took me many years to learn that if you don’t like keeping money, money doesn’t want to stay with you either. All my friends earned less than me back then became far more wealthy over the years. I only started to learn to save for retirement. But it’s better late than never right?
Cook your meals at home as often as possible
Covid lockdown’s really helped with this one. From eating out almost everyday during the week to having home cooked meals everyday is big change. It’s shocking to see how much money you could saving by not going out to eat restaurant food.
But wait, you can still save more on grocery shopping!
Never go grocery shopping when you are hungry
Number one rule is never go grocery shopping when hungry. It’s magical to see how much money you can save on grocery shopping with a full stomach.
Plan your meals for the week and only go grocery shopping once a week with shopping list
I know someone could go with beans on rice everyday to save money but it’s a bit too hard to follow. Meal planning every week however, is much more doable. My problem right now is living so close to the shops that it’s easy to pop in on my daily walk and just buy whatever. So it’s crucial to only go grocery shopping once a week with a shopping list. Only buy what’s on the list. No more impulse purchase.