Simple Tips to Spend Less and Save More!
This post is dedicated to saving money. Whether you are saving for a big adventure, a trip or something else that requires a little financial planning, chances are you are going to need to make some changes to your current lifestyle and/or spending habits. As someone who has been financially preparing herself for a several month venture abroad I definitely have a few things to say about this topic!
First off, it’s important for me to say that I am not a financial planner. I have no experience in investing and I can’t give you advice on how to optimize your savings. This is really just some initial thoughts on how to spend less and save more, but even more specifically, things that I did that worked for me!
Track your spending
Start paying attention to where your money goes. When I started doing this I created a spreadsheet and tracked every penny I spent. I broke things into columns like insurance, bills, utilities, food, entertainment, miscellaneous, etc. I did this for a good 4-5 months. This can be a real eye opening experience to see what you spend your money on. This also gives a good starting point to get a feel for where you can cut back. Some expenses are fixed and they are what they are, other things you can reduce or even eliminate.
This is probably the most obvious point, but certainly the most important; in order to save you must spend less. This part can be challenging for some people, you must look at your lifestyle and habits and make decisions about what is important to you. Decide what you are willing to reduce or forego on, and what you are unwilling to compromise. Think of giving precedence to that which brings value to your life – I am talking joy, happiness and fulfillment. For example, I am okay with eliminating frivolous clothing purchases, but I love going out for dinner. A nice meal out once a week is something that brings me joy, that is something I am unwilling to compromise.
Below are a few ways that I cut back:
- Insurance - Come my insurance renewal time I shopped around for a better rate and saved $480/year.
- Transportation - In the warmer months I rode my bike whenever I could and easily saved $400 over 6 months.
- Food - I make my lunch just about everyday. This easily saves $50+/week, and over time that really adds up ($2500+/year) if you currently buy your lunch daily.
- Drinks - DIY coffee/tea. I have a teapot and all the tea fixings I need at work, and therefore, do not need a morning or afternoon run to a coffee shop. I don’t drink much coffee anymore, but when I did I had a small French press at my desk. I still go out for the occasional drink, but it’s a treat, not a habit. This easily saves $10/week, which again really adds up over time ($400-500/year).
- Shopping - Shopping for anything that I didn’t NEED was eliminated; no more browsing Winners or Homesense ‘just because’. Shopping became purposeful and strategic. This was actually the big thing that really changed it all. I can’t give you a specific number here other than saying the savings are significant.
- Shopping second hand - Shop second hand, where possible. If you are lucky enough to find a trendy second hand clothing store like I was, then you’ve got it made. I love buying second hand, not only because of the savings, but because of the eco-footprint. Now, I always look for second hand before considering buying new. There are some things you obviously can’t buy used or may be specialty hard to find items, but this is a great place to start. I love my local Plato’s Closet.
- Bank Fees - If you aren’t already, start paying attention to your banking fees – are you paying bank fees? ATM charges? Interest? Figure out what you are paying and reduce that – with a little planning there is no reason you should need to pay for any of these. I hadn’t paid too much attention to this before, but when I did I found that I was often paying $13/month for going under the ‘minimum balance’ for my account to be free, even if it was just by pennies. This was plain stupid, all because I was lazy and not paying attention.
- Credit Card Perks - Get and/or switch to a credit card with a sweet perk, like cash back or travel rewards, etc. I have saved a whack of money on travel by doing this.
- Enjoy all the great things that are free! - There are always places to enjoy and things to do that are free; summer festivals, parks, picnics, hiking, biking, the bruce trail, the beach, the library, etc. A little research into what is happening in your area will likely reveal many fruitful options. Think outside the box, go outside, try something new!
Feed Your Savings First
Once you know your fixed spending (those mandatory expenses like rent/mortgage, utilities, insurance, etc.) you can come up with a number of what you can reasonably save every paycheque. Choose a number you are comfortable with; it should help you reach your financial goals but not leave you feeling like your life sucks –ie, leave room for fun. When you choose that number, every time you get paid feed your savings first. You can set up automatic transfers or you can manually do it yourself, whatever gets the money in the right place. And once it’s there, don’t touch it! Or rather, try not to touch it. I dipped into my savings here or there for small trips I was taking while saving for the BIG trip - but I was completely accepting of this!
So, those are just a few of the things I did to save more and spend less. And let’s be clear here, I did not live like a pauper over the last two years either. I went out for dinner, I socialized and participated in fun weekend activities, I went to yoga classes and I travelled both overseas and locally. Truly, what it really came down to was just not buying stuff. Or rather, not buying stuff I didn’t need - it’s a bit of mentality change.
When you actively start trying to save money there is a bit of shift where ‘stuff’ just doesn’t seem as important. What matters to me is spending time with the people I love, being outside and having life experiences, and that is where my money goes!