How to Save $500+ Per Month
There is no denying that times are tough right now, and everyone Australia-wide is carefully weighing up every spending decision. To help you save money on household bills and perhaps start building a “rainy day” account to see you through the months ahead.
4 Steps You Can Take to Get on Top of Your Finances
1. Look at Your Spending Habits
If you don’t already have a budget, then it is a good idea to create one. The most effective way to get in control of your money is to find a budget spreadsheet and go through your last year’s bank statements to look at your spending.
This can be a real eye-opener! Many of us don’t realise how much money we unconsciously spend on coffees, drinks, eating out and shopping.
Look at your bank and credit card statements can really show you where you can cut back if needed. At Zippy, we can provide you with a simple and easy to follow budget spreadsheet if you would like one.
Potential savings: $100 – $1,000+ per month
2. Shop Around for Better Deals
You have probably heard this advice before, but perhaps didn’t have the time to action it. Well, now we have all the time in the world – so we can shop around for the best possible deals on our household bills.
You can either negotiate with your current providers or shop around for a better deal – there are plenty of them out there at the moment.
Picking up the phone is often the most direct way to get a result, but many call centres are over-loaded right now, so sending an email or making contact via their website might be your best bet. You may be able to negotiate a better deal on:
- Electricity and gas – ask what discounts they have for direct debits or paying on time
- Phone and internet packages
- Pay TV subscriptions, i.e. Foxtel
- Mobile phone contracts
- House and contents and/or car insurance
- Health insurance – do you need extras right now?
If your income hasn’t been affected by COVID-19, then the next piece of this puzzle is to bank any savings, where possible. For instance, if you save $100 per month by cancelling your extras cover on your health insurance, set up a direct debit to transfer $100 per month from your pay cheque to a savings account.
This way, you won’t fritter the money away – and you can start building a rainy day fund.
Potential savings: $100 – $1,000+ per month
3. Do You have a Car Loan, Personal Loan or Other Debts?
If you have a mortgage, now is the ideal time to refinance to bundle your loans together and reduce your monthly repayments.
As well as the potential to save a small fortune on mortgage interest, due to the lower interest rates on offer at the moment, you may also want to combine all of your other debts into your home loan. You will then have just one repayment each month, instead of juggling multiple debts – and you will be paying far less interest too.
Let’s say your current mortgage repayment is $1,800 per month. You also have a car repayment of $600 per month (interest rate 6%) and a personal loan of $200 per month (interest rate 10%), bringing your total outgoings to $2,600 per month.
If you have equity in your home, you may be able to refinance bundle all of these loans into your home loan. This means you will pay a lower mortgage interest rate of between 2.2% and 3.5% on all of these debts – down from 20% on credit cards – and you will reduce your monthly repayment.
Potential savings: $100 – $1,000 per month
4. Streamline Your Superannuation
If you have had more than one job over the years, there’s a decent chance you have more than one superannuation account. If this is the case, you are unnecessarily paying double (or triple – or more!) the fees and charges you need to be paying.
Now, you might be thinking: it is only a few hundred dollars a year. What does that matter? When you consider the power of compound interest, you realise it matters quite a lot. Just $250 today could be worth almost $5,000 in 30 years’ time, based on an average 10% return. Multiply this figure by multiple funds and multiple years, and you are needlessly robbing yourself blind.
When I discussed this with one of my borrowing clients, we discovered he had 8 separate superannuation funds! I was able to link him up with a financial planner, who worked with him to roll all of his money into one suitable superannuation funds. Even with isolation practices in place, you can meet with a financial planner over Zoom or Skype to get on top of your finances. Zippy Financial can recommend some experienced, reputable financial planners should you be looking for one.
Potential savings: $250+ now; thousands of dollars in future wealth
Frequently Asked Questions
What is the importance of creating a budget?
Creating a budget is crucial for understanding your spending habits. By going through your bank statements, you can identify areas where you might be spending unnecessarily and can cut back.
How can shopping around for better deals help me save money?
Shopping around for better deals on your household bills like electricity, gas, and insurance can help you save a significant amount of money each month. You can either negotiate with your current providers or switch to new ones offering better deals.
What should I do if I have multiple debts like a car loan and a personal loan?
If you have multiple debts, consider refinancing to bundle your loans together. This can reduce your monthly repayments and the interest you pay.
How can streamlining my superannuation accounts benefit me?
If you have multiple superannuation accounts, you're likely paying extra fees. Consolidating them into a single account can save you money now and increase your future wealth due to the power of compound interest.
What should I do with the money I save?
If your income hasn't been affected by financial downturns, consider banking any savings you make from these strategies. This can help you build a "rainy day" fund for future needs.
How can Zippy Financial assist me in saving money?
Zippy Financial offers expert assistance to guide you towards a brighter financial future. They can help you save money on household bills and navigate challenging financial times with confidence.
Give Us a Call
Take control of your finances today and let Zippy Financial guide you towards a brighter financial future. With expert assistance, you can save money on household bills, build a 'rainy day' account, and navigate these challenging times with confidence.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.