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40 Frugal Ideas to Have Fun These Holidays

Being on holidays doesn't mean that you have to choose between fun our your budget goals. Check out these 40 Frugal Ideas to have fun on your holidays! Photo: Vicko Mozara (Unsplash)

With the holidays approaching it can be a great time of year to plan all those fun activities you’ve been wanting to do. Those ones you keep putting off because you didn’t have the time or money. Sometimes, maybe even the energy. Don’t let your holidays disappear before your eyes without feeling like you made the most of them. I’ve found that in the past, even when I’ve have a free day, it can be hard to think of fun things to do that won’t take up an entire weeks entertainment budget. All you need is a little creative thinking, you don’t have to make a choice between fun and your budget goals!

Being on a budget should not impede you from enjoying your break and having fun. When you put your mind to it, there are really a huge list of things that you can do for fun over the holidays, and they can certainly be done without spending a lot of cash! Plan ahead and rethink your entertainment options, they really are unlimited.

If you have particular interests not mentioned, this list could be even longer! Here are 40 Frugal Ideas to Have Fun These Holidays to get your started! Most of these are free or can be done with very little cost. 🙂

  1. Have a Movie marathon day/night. Select a theme such as 80s movies, or your favourite actors films. Invite friends or family over and have a poll on what to watch. 
  2. Sit down with a partner or friend and listen to an album from start to finish reading over the lyrics. In today’s world of Spotify, Netflix and Social Media, this activity really does get pushed to the back burner. 
  3. Go star gazing. Go on a road trip out of the city and watch the night sky. 
  4. Colour. Grab an adult colouring book and some pencils and get colouring. 
  5. Read a book. Start a new book or read an old favourite. 
  6. Start to learn an instrument or if you already play one, learn a new song. Learning one with a friend – even better.
  7. Cook a nice meal or learn a completely new recipe.
  8. Bake dessert or a cake. Make something special like creme brulee or waffles. 
  9. Play a video game – if you’ve got your old Wii or N64 crack it out. Invite a friend or two over. 
  10. Invite friends over for a board game night. Ask your friends to bring over one game each. Ideas include Chess, Pictionary, Monopoly, Cards Against Humanity or Uno. 
  11. Watch a documentary about a topic you are passionate about. There are stacks on Netflix to choose from.
  12. Watch a stand up comedy show, again there are heaps on  Netflix. Or better yet find a free comedy night in your city.
  13. Binge watch a new TV show that you’ve been dying to watch. 
  14. Have a picnic.
  15. Go for a walk. Drive to a new area for a change of scenery.
  16. Go out for coffee with a friend or relative.
  17. Do something artistic; draw, paint, or get crafty.
  18. Write something a poem, short story, or try your hand at writing song lyrics.
  19. Go to a local BBQ area with friends. Bring some sporting equipment and have a few games. 
  20. Attend a free local event or festival.
  21. Check out the library and read some new books.
  22. Go to a free Museum or Art Gallery you’ve been wanting to go to for ages.
  23. Take a drive to a national park for a hike or bush walk.
  24. Grab the bikes and go for a ride with your partner or friend. 
  25. Swim at the local pools or go explore a new beach. Don’t forget to check out the rock pools!  
  26. Hire a kayak for an hour and explore on water whilst getting some sun and exercise.
  27. If it’s a hot day, have a water fight. Hit up your local Kmart or cheap shop for water guns or water bombs. 
  28. Find a local pool-hall and play a few games.
  29. Check out online event guides for free (or affordable) gigs.
  30. Invite friends over for a cocktail party. Get everyone to bring a bottle of alcohol and juice/soft drinks so you can make a few different drinks.
  31. Go to a botanic garden and explore the different gardens.
  32. Take a trip to the city and bring your camera. Take photos.
  33. Try and find cool cinema playing some unique movies. A foreign film, premiere film or old fave.
  34. Check out Things To Do on Trip Advisor in your city and do what you haven’t done yet.
  35. Go camping for the weekend. Or camp in the backyard.
  36. Go to a Drive in Movie.
  37. Redecorate your home. Shop your home for decor items to freshen up your home. Bring out a new quilt cover and sheet sets, put a new photo in your frames, put on a nice smelling candle and swap your decor items around.
  38. Have a pamper night. Get in your favourite robe, make a DIY face mask & put a hair treatment in. Run a warm bath with some candles and chill out music.
  39. Teach yourself a new skill you’ve always wanted to learn. How to sew, sing, dance, take photos. Look up videos on YouTube and start learning!
  40. If you’re feeling extra motivated, get organised. Declutter the items in your home that you no longer need. Scan any old photos, or cards you want to let go of. Go through your wardrobe and cull anything you no longer wear. Tackle the kitchen cabinets and donate anything that’s not needed. You will feel amazing after all that excess is gone!

What Frugal Ideas For Fun These Holidays do you have? Share them in the comments below so we can grow this list even further 🙂

Need some tips for gift ideas this Christmas? Check out 10 Minimalist Gift Ideas that Add Value to Your Life – Not Stuff! 

Budgeting

13 Effortless Tips to Save Money on Your Travel Budget

Travelling can be costly but doesn't have to break the bank. With a few small tweaks to your spending you can ensure you save money on your travel budget and spend where it counts.

The best part about travelling is preparing the travel budget… eh… said no one ever? Even myself, a self-confessed budget-oholic can feel overwhelmed trying to get the best prices and deals and attempting to not go spend-cray when we are living for the moment on holiday.

Seeing as we have just gotten back from a month in Europe I thought what better time then now to share what tips and tricks I use when travelling to stretch our travel budget. We travel reasonably often on our own as well as on band trips and that can really add up especially if you are not watching what you spend each time. If you are only travelling once every few years you can probably get away with going a bit all out on a hotel room, shopping trips and fine dining on your vacation. But that’s not going to work so well for your budget when it’s a regular gig.

The cost of travel can be significantly reduced with a little bit of planning and being selective with what you will and won’t spend on or just tweaking is so you don’t spend as much ;). Some of it starts before you have booked a thing and others are to help you maintain your goal budget once in your destination.

Check out 13 Effortless Tips to Save Money on Your Travel Budget for how you can save on your next trip!

  1. Shop around for all bookings

Shop around from the get go and consider all options when booking a holiday. Is a hotel cheaper and better value for accommodation or would an Airbnb be better? If you’re just after a bed and shower and plan to be out all day, a hostel could be a more budget friendly option. Can you be more flexible with flights days? Booking a flight the day before or after you planned to or at a less convenient time might cost you some sleep but save you hundreds of dollars per ticket. When booking hire cars get 2-3 quotes so you can make sure you are paying a reasonable rate. A little effort at the start of your holiday planning can add up to huge savings. Don’t forget to use the incognito mode in your browser in order to get the best deals on flights and accomodation!

Potential Savings: Picked Airbnb over Hotel room saving $40 a night on accomodation 

2. Book your flights and accommodation early

Book well in advance for tours, car hire, accomodation and flights. Bookings closer to the travel date means you will end up paying more or missing out on the dates or times you want. If you need a particular travel day or time you will most likely have to pay much more for the same service than you would have if you just planned ahead. A lot of accommodation sites such as Airbnb, Booking.com and some hotels offer free cancellation on bookings up to a certain time depending on their terms and conditions for the place you are booking so you can often get book accommodation in advance and change the booking dates without being hit with fees if you need more flexibility. Budget Traveller recommends booking flights on Tuesday to get the best flight deals.

Potential Savings: Flying on a 7.40am flight over 11am flight saving you $180

3. Walk or take public transport as much as possible

Where possible on your holidays walk to places to get the most out of your travel budget. You will not only save money by skipping the taxi, get some exercise and fresh air as well as get to see more this way than if you were to drive or take a train. If you can’t walk or the distance is a bit far, consider taking a bus or train over a taxi to reduce your holiday transport costs. Look into any travel passes such as 48 or 72 hour passes that are available that might be able to save you on transport costs over the duration of your stay.

Potential Savings: Taking the train or bus $4 fare over $15 per trip taxi ride

4. Find free activities and entertainment

Travelling and sight seeing can be extremely expensive, especially when you have a lot of bucket list items to tick off. We were happy to spend on activities we really wanted to do or see and the rest of the time tried to find free forms of entertainment. This could include exploring your destination city on foot, checking out a local park, spending some time in your resorts pool or at the beach, visiting a free Art Gallery or Museum, checking out some local scenery or chatting to some other travelers at a bar or cafe and swapping stories. Don’t assume everything fun or enjoyable costs money. Seek out budget friendly activities and your travel budget will go much further without you missing out on the really awesome stuff.

Potential Savings: Free museum entry over ticket entry to viewing platform $50

5. Spend your money where it counts

Following on from finding fun free activities, spend your travel budget on the things that matter to you. If you love Theatre go to a show on your trip, see a band you might not be able to see at home, do a group tour to a site on your bucket list. By being selective with where you spend your cash, you can afford to do those really important must do ones.

Potential Savings: Guilt free spendings here to do what you really want thanks to your saving efforts elsewhere 

6. Drink less

Alcohol can be very expensive in a lot of cities around the world. A single drink can set you back $10 or more, particularly if you prefer fancy fruity cocktails like myself. If you are going away for a week you can probably get away with buying a few expensive cocktails with dinner, but when you are travelling for a month that cost is going to eat away your spending money fast. On our most recent trip to Europe we limited drinking in the more expensive cities and stuck to going to bars in the more affordable destinations. There are only so many $14 Vodka and Oranges you can justify on a trip without eating away your travel budget.

Potential Savings: One less cocktail a day at $15, total saving of $105 for the week

7. Pack your lunch and cook occasionally

I actually never thought I would be saying this to anyone but here I am. A couple of weeks ago we were in the Faroe Islands and Iceland and were astounded at the price of food! We thought we lived in one of the most expensive cities in the world but this was a whole new level of expensive! On our first day in the Faroe Islands we paid $40 for two small sandwiches and two small bottles of soft drink. Ouch! We planned to stay eleven nights out of thirty in Europe in Faroe and Iceland and knew paying such hefty food bills three times a day was going to completely blow our travel budget.

Instead of forking out $50 plus per meal we grabbed some groceries to make breakfast at our accommodation each morning to save us buying one meal each day. We also grabbed a few ingredients to make up some sandwiches to take on the road for lunch a few of the days. A handful of the nights we cooked or heated up frozen meals. It’s not something you probably need to do for a short overseas trip in an affordable location but is extremely helpful when you are planning a longer stay, particularly in the more expensive destinations where eating out day to day is going to cost a lot more than you expected.

Potential Savings: Eating breakfast at your accomodation total savings $15 to $30 per day

8. Shop less

I know a lot of people who travel plan to go shopping potentially leading to Mindless consumption. I’ve never really understood this myself, I can shop any day of the week in Sydney and don’t feel spending my time on holidays stuck inside four walls at a mall is a valuable use of my time or airfare. Since I don’t shop on holidays unless I really need something, I not only save myself money when travelling but save myself time. Time that I would much rather use exploring a new city and country, not on finding stuff I can cram my home with.

That doesn’t include the nuisance of lugging around heavy, packed to the brim luggage on your flights or paying excess baggage fees which seem to be getting more and more exorbitant. Once we cut out unnecessary shopping on our holidays it meant we could afford to travel more often and didn’t need to save up a whole bunch of excess cash for spending.

Want to know how to pack minimally for your next trip. Check out these 16 Easy Tips for your next trip!

Potential Savings: Not shopping everyday $100+?

9. Be selective with souvenirs

On our first couple of overseas trips we felt the need to bring home souvenir from each place we visited. How could you show that you’d been to Thailand without a key ring to show? You name it we bought it; decorative souvenir plates, key rings, snow globes (which always seem to break :/) and a new fridge magnet from each city. That didn’t include the souvenirs we bought back for family.

Soon enough we found ourselves running out of walls and space to house them all.  And I’ve got to be honest with you, apart from a select few displayed around our home, we never really looked at the others sitting on the shelf. We realised that we probably didn’t need all these trinkets to remember our holidays and that the majority of them were really just dust collectors. We decided to limit our souvenir collection for future trips and decided to be a little bit more creative about what we did bring home.

This past trip we limited our souvenirs to coins we collected from each location, ticket stubs from places we visited on our trip, post cards for our family and a small number of post cards we picked out for ourselves. We also took many photos to remember our travels. Not buying souvenirs made travelling easier as we weren’t risking going over our weight allowance and didn’t have to worry about having breakables in our bag that might get damaged in transit. If you do find joy in souvenirs pick one or two you would love to display in your home from your destination but just keep in mind if you do love to travel these are going to add up over time.

Potential Savings: resisting going overboard with souvenirs $50-100+

10. Pack thoughtfully

By bringing what you need you can reduce the money you spend at your destination and help your travel budget. Unless you do your research, some destinations can really set you back for things you can buy affordably at home. I lost one of my gloves in Iceland and the cheapest pair I could find as a replacement was $40. I left my raincoat at home due to limited space in our luggage thinking my umbrella would be fine, and after realising that umbrellas are redundant in the European weather, the cheapest raincoat at my destination that I could find was from $150 AUD. Keeping a travel check list can help you to remember all the important things you will need for your trip and save you buying them! Packing a Capsule Wardrobe can go a long way to covering you for all your clothing needs on your holiday.

Potential Savings: The cost of buying clothes etc $20+

11. Utilise Free WIFI

Save money on your travel budget by taking advantage of free WIFI. Buying a sim at each of your destinations can add up. For most of our destinations we got away with using our Airbnb’s WIFI and Free WIFI in cafe’s. Downloading Google Maps of our destinations also really helped us to access the maps we needed whilst out and about.

Potential Savings: Staying in an airbnb and not paying the $10+ a day WIFI charge for each phone, potentially $70 per person a week

11. Keep your mind open to alternative tourist attractions

Consider alternative options, outside of main tourist areas to help your travel budget go further. In Iceland, we realised that we’d left it too late to book the Blue Lagoon Pools. We decided rather than to go at night we’d try and find another Geothermal pool on our road trip. We found one on our route that ended up only costing $80 for the both or us versus the $200 + it would have cost had we booked at the Blue Lagoon. It ended up being a good thing and meant we had saved a fair wad of cash for more adventures!

Potential Savings: Picking a lesser known tourist attraction for a similar but more affordable one without the crowds $100

12. Shop around for your travel card

Travel cards can charge a range of fees and eat into your spending money. After purchase fees, reload fees, currency conversion fees, ATM fees and the like they can quickly eat up your fun money. When shopping around be sure to compare as many options on the market. A good starting point is Choice’s Travel Money Card comparison but be sure to check the cards website before deciding to ensure you have the most up to date information.

A good starting point is to find a card that has no purchase or reload fees (fees to add money to your card), and ideally one with a low currency conversion charge or none at all and no ATM fees. I recently used the Multi-Currency Cash Passport which had limited fees mainly related to Australian ATM use. Another one I was keen on getting but ran out of time to get  was Virgin’s Velocity Frequent Flyer Card which also allows you to earn points as you spend.

Potential Savings: $5 ATM fees per withdrawal, $10 reload fees, conversion fees

13. Set a daily budget before you leave for your holiday

Don’t wait to arrive at your destination to think about the travel budget. Before we left for our trip we set a daily budget and converted that amount in each currency we needed based on how many days we were staying in each. This gave us a stopping point so we could visibly see when we were nearing the end of our budgeted spending money.

If you are budgeting $150 a day as a couple and staying somewhere for two weeks, only convert $2100 in spending money. If you need more you can always add more later, but that limit will help set you a guide day to day for whether you are within your travel budget or over and you can adjust your spending accordingly. It’s best to research the cost of local restaurants, transport etc from travel bloggers or ask a friend who has been before to get an idea of what  you should be budgeting.

Potential Savings: Sticking to your $125 a day travel budget rather than not having one and ending up spending $200 a day or $500 extra than planned over a week

How do you travel on a budget? What are your tips for stretching your dollar further whilst still having an amazing, fun holiday? Share your tips in the comments below 🙂

Want more tips on how to save money for your next trip? Check out these 10 Easy Tips to Save Money on Your Groceries! 

 

 

Budgeting

18 Tips to Help You Break the Debt Cycle

Are you ready to take action and break the debt cycle? A small amount of planning and new habit forming can go a long way to helping your smash your debt and get on the path to financial freedom. Photo: Alice Pasqual

Being stuck in the debt cycle can seem like a never ending treadmill of stress and struggle trying to keep ahead of what may seem like never ending repayments. Once you add a mortgage, car loan and a few credit card repayments to your budget finding any spare cash can become increasingly difficult and make it harder to break away from debt and get back on your financial feet.

If you are constantly making purchases on the credit card and not paying them off in full the following month you are going to eat up a lot of your hard earned income in interest payments. Money which could be better utilised whether that be saving for a new home or your kids education, your retirement or using that spare cash for enjoyment such as holidays or seeing your favourite band in concert.

No matter where you are on your journey to financial freedom there are methods to help you get on top of that debt. Even for anyone with significant amounts of debt, their financial story isn’t over and they can potentially have the most options for action in terms of retraining their habits and living within their means. No one needs to live under a cloud of debt indefinitely. There is a way out!

Here are 18 Tips to Help you Break the Debt Cycle.

1. Think about the interest 
It can be so easy to forget that the price tag of the item you are about to swipe on your credit card is not the final price you will pay if you don’t pay on credit. If your credit cards interest rate is a whopping 19% or more, every purchase you make on that card which is not paid in full will attract hefty interest charges. That $99 dress you just charged will cost you a hell of a lot more year that you don’t pay off your credit card balance. And it doesn’t stop there, that is just one purchase – imagine that interest on every purchase you make! That sale price doesn’t look as good now does it?

2. Cut up your credit cards.

If you are the kind of person that can’t resist a good deal and doesn’t pay your credit card off in full each month it is time to cut those cards up! Stop spending money you don’t have. If you can’t show restraint, take the easy step of grabbing a pair of scissors and cutting up that card. It will only take  you a few seconds and save you a world of stress and hardship in paying off any extra debt. Don’t let it keep spiraling out of control. You can get out of this and you can start today by cutting up those credit cards!

If you are buying everyday purchases on the card and are not paying them off in full at the end of the month you need to reconsider your income and expenditure and spend less than you earn. The only reason to use a credit card is to have it as a tool to keep track of your expenses, to earn rewards points on everyday expenses and only if you are paying it off monthly! If you are disciplined enough to do this you can save yourself some serious money by keeping your day to day cash in your mortgage offset account or in a high interest savings account. Otherwise get those scissors out!

3. Stop trying to impress others

A lot of people get caught up in looking at other people’s lifestyles and attempt to keep up with them. I guarantee no one ever asks the same people they are trying to compete with – how much debt do you have? Yeah sure, Joe down the road might have your dream car but he probably also has a $200 weekly car repayment to make for the next 7 years which probably isn’t as appealing to your green-eyed monster. Yet so many people go out and buy new cars, bigger homes or brand name designer fashion to fit in with others without a thought for the struggle that is going to put on their finances, such as affording the basic needs of food, shelter, medicine or their education. Break the debt cycle!

Do you feel the need to buy the latest fashion and accessories? You might be surprised to find that other people are probably not that interested in what you are or aren’t wearing. People are too worried about their own lives to focus on your daily outfit choices or the fact that you only spent $50 on your handbag rather than $300. I have often had handbags under $50 and constantly got compliments – no $300 designer bag necessary!

If you are surrounding yourself with people who expect you to meet some kind of designer brand level of outfit choices your probably need to reconsider who you hang out with or reassess if those friends even care, maybe it is your own standards you are trying to keep up with.

4. Avoid the shopping without a list
Stop going shopping unnecessarily! You’d be surprised how little you’d spend if you didn’t step foot in the shops at all or open the latest sales email. If you have endless emails from clothing shops or stores that tempt you constantly, unsubscribing from them can help remove that urge to buy.

Make a goal of only going to the shops when you need to and go with a list of what you need to buy and from where that you have built up over a week or more. Don’t walk down the make-up aisle if that is not on your list. This alone can help you resist unnecessary purchases as most spending occurs when you are browsing which can end up with you buying something you don’t need and will later regret.

Shopping with a carefully prepared grocery list can go along way to saving money on your weekly shop that can be redirected to paying down your debts faster!

5. Take advantage of new credit card balance transfers
If you want a leg up to pay off your credit card balances, consider a balance transfer to a new credit card that will offer you 0% on the balance for a certain period of time, usually between 6 to 24 months. This can potentially reduce the interest rate you are paying to 0% and help you get on top of your debt in a short space of time.

Only do this if you cut up the new card immediately otherwise you will end up back where you started. Also be sure you will be able to pay the balance transferred onto the new card within the low interest period. The new interest rates can be significantly higher usually starting at 19.99% post the discounted interest period so you will want to pay it back within this time frame to avoid the increased interest rates.

This can be a great way to smash that debt balance in a defined period of time at the lower interest rate. Do not under any circumstances add to the balance of this new credit card. It is not for you to spend with, but as a tool to help you get ahead and pay down that debt!

6. Ask your credit card provider for a better rate

Alternatively to the balance transfer option, call up your current credit card provider and ask for a better, more competitive interest rate. If they want to keep your debt on their books they will have to meet your request and better your interest rate. This will save you on interest charges without the time limit of the balance transfer option.

7. Always pay more than the minimum on your credit card debt
When paying off your credit cards always pay as much as you can onto them each month – avoid only paying the minimum. If you can only afford the minimum find a way to change that – cut other expenditure, get a higher paying job, or a second job to increase your income if changing jobs is not an option. Temporary pain will be required to achieve financial freedom.

By only paying the minimum repayment you can add decades and thousands in interest to the debt you are going to have to pay off. Using Money Smarts Credit Card Calculator a $2000 credit card balance paid back at the minimum repayment of $41 a month would take over 21 years to repay and cost over $6500. That means you will in effect be paying for those $2000 purchases three times over for the next 21 years! And for some people $2000 is just one months expenses. Imagine if this is being charged, month after month.

Never settle for only paying the minimum repayment. It should read “what to pay if you want to be in debt forever and pay 3X the price of everything you’ve ever bought and have no desire for financial freedom”. The only time you should utilise the minimum payment is if you are using the Snowball Method and throwing all your spare cash onto the lowest debt and slowly knocking each one to zero.

8. Ask yourself is this purchase is a want or need.
It is important to consider what our wants are versus our needs. Every time you pull out the credit card or cash, ask yourself is this a want or a need? If it is a want, something that you’d like but could live without, ask yourself is this purchase is so important to me that I am willing to be snowed under by debt in order to have it. Is it worth paying potentially 3X the purchase price of the handbag or new runners over a period of years? Or would it be better just to hold off a couple of weeks or months and save up the cash?

If it doesn’t seem worth spiraling into more debt, rethink your purchase. Sometimes we can become so desensitised by buying things with a simple tap that we forget to stop and ask ourselves these important questions. Being more mindful with everyday purchases can aid us significantly to break the debt cycle! Shops are designed to make us want to spend money, whether it be the loud music throughout the shop, the vanilla caramel scented candle wafting through the store or pushy, “extremely helpful” sales staff. Take a moment to stop and assess whether buying this item is going to add to your long term happiness or take away from it.

9. Channel your excitement into your savings
Make the decision to buy things in cash going forward. By buying in cash and saving up for highly desired items you can give yourself the time to save up money gradually for it. You will be surprised how easy it can be to save for something that you really want when you know that after all that hard work you will have that item you desire – debt free.

When you really want something, you will know if it is worth your hard earned money as you will be making the necessary sacrifices to get it. You might start spending less on eating out each week or skipping regular drinks nights in order to save to go on that first overseas holiday.

When you save towards something you want and worked hard in order to acquire it, instead of feeling a sense of guilt or buyer’s regret, you will feel a sense of accomplishment and joy knowing that you worked hard and saved for something meaningful that was going to add value to your life and that you paid for in cash. There will be no looming debt hanging over your head for months or years to come.

I can’t imagine anything worse than going on an amazing two week holiday and coming back to deal with the debt that remains after the fun is over. It’s going to be a lot easier to be motivated to save leading up to that amazing experience than once it has been and gone and you are dealing with the debt consequences.

10. Buy what you can afford not what you can borrow

When we bought our first home we were surprised to see how much the banks were willing to lend us. As I did our actual budget (not the made up ones the banks use to justify lending you a mortgage at 50% of your combined wage) we could see how borrowing the larger amount was going to be a huge financial strain.

Instead we stuck to a mortgage that would be well within our budget which will go a long way to help us break the debt cycle. This included built in safe guards that gave us some extra financial security in case rates went up or in the event that we had to live off one income. Only you know your true spending habits and what you can reasonably afford to pay back. Don’t let others convince you that your borrowing power is bigger than it really is. Check out the benefits of a smaller home and mortgage here.

11. Don’t become accustomed to the mentality of having debt repayments
I have seen this happen time and time again with young and old alike. They pay out their perfectly good car after 5-7 years of repayments and immediately start talking about what car they want next.

Even though they have a perfectly functioning car, with time on their side to save for the next one, the thought of saving up for a car over time, or having a slightly older car is considered too painful, so they go out and get a another car loan.

Break the cycle! Be weird and say no to debt!

If your car is reliable and not that old and mechanically sound, it is so bad that you hold onto it for a couple years more and save up to buy your next car in cash completely debt free? Paying $100 or more a week for the next 5-7 years is a big commitment and is going to get old fast!

12. Reassess what you are willing to get a loan for
Be selective with what you are willing to go into debt for. Only go into debt for purchases that increase in value or are considered an investment. Getting a degree in your chosen career can lead to a higher salary, a house can provide a return through equity.

On the other hand shopping sprees on the credit card, holidays and a new car aren’t an investment and don’t hold their value so going into debt for items like these should be avoided. Do you want to be paying off that shopping spree years down the track after the clothes are out of style and most likely already donated to charity or sitting in the back of your wardrobe?

If you need to get a mortgage for a house that will increase in value over time, that can be considered “good debt” but a $2000 credit card balance for your new sound system is not a good idea and should be avoided.

13. Put every spare dollar that you can to pay your debts down

Most people when buying their first home are signing up for huge 25 to 30 year mortgages. If your mortgage is a 30 year mortgage, it doesn’t mean that you have to wait that long to be debt free. Aim to pay it off as fast as you can.

Are you prepared to stay in your full-time job, particularly if it is a job you don’t enjoy, for the next three decades until you are 60 to own your house? By adding an extra $50 a week to a $500,000 mortgage you can reduce your mortgage by over four years and save $65,000 in interest. A huge saving! Imagine what you could do if you could add $100 a week to it in additional repayments! Break the debt cycle and avoid letting your bank or credit card provider dictate what your repayment timeline will be.

14. Save up an emergency fund of $2000
Part of the never ending debt cycle is attributed to not planning ahead. Suddenly your car dies on the freeway and you need to put $1200 on the credit card for repairs. The hot water system goes and again you are stuck without a leg to stand on and putting that on the credit card.

Plan ahead. Budget emergencies are just as likely as the chance of rain. Find a way to save up $2000 as quickly as you can and keep it in an account for emergencies only. This does not include a nice hand bag that is on sale or last minute drinks with friends. This is only for genuine emergencies like a break in occurs and you need to change the locks or you have a severe tooth ache and need to get it looked at. Get organised and sell your clutter if you have to. 

If you have to use this fund you will need to build it up again. Next time you have a flat tyre you won’t have to panic and stress about finding the money and won’t even need to think about  bringing out the credit card.

15. Prepare a budget and stick to it.
Knowledge is power when it comes to finances. If you are aware of what your budget is you can be more mindful of your spending and more likely to break the debt cycle. If you know you have a $500 electricity bill every quarter start budgeting for it every week. Don’t wait until the bill comes and then try and figure out where the $500 is going to come from and end up paying your bill late with an added late fee.

If you own your home, be prepared to spend regularly on maintenance. Living week to week can put you in a bind when your home needs urgent repairs and you haven’t planned ahead and put away money for such events. Check out these Everyday Savings Tips to help kick start your budget and free up some cash to break the debt cycle!

16. Learn to be content with what you have
Once you realise how little you need to be happy the desire to consume more diminishes. You no long feel as big of a rush buying things. The thought of parting with your hard earned cash will make you more mindful of what you are buying.

Learn to be content with what you have. This alone can go a long way to break the debt cycle. Do you really need a brand new $35k car on finance on your $50k salary when your current car works perfectly fine? Are you willing to pay x dollars every month for the next 60 plus months? In good times and bad – when you are unemployed, when you are trying to live on one income, when you decide to cut back hours at work to study for a new career – that debt is going to still be there.

Maybe having that spare money each week could allow you to go on an overseas holiday each year, cut back your work hours to spend more time with your family or allow you to retire earlier. Sometimes more stuff is not the answer to contentment.

17. Find new past times that don’t involve shopping.
If you are finding yourself constantly browsing online shops or at the mall you may need to pause and recognise the habit and ask yourself – Is there something more valuable I could be doing with my time? How often are you shopping, for how long and how much are you spending? Keep note of it.

Gradually retrain yourself to stop the automatic habit of logging into your favourite stores site or browsing aimlessly on your lunch break. Think about all the things you could be doing instead of shopping; reading a new book, going for a walk, meeting a friend for coffee, learning a new skill or hobby, catching up with family or seeing a new film.

If you have friends who you shop with regularly make a suggestion to do something different together. There are plenty of things to do that are more enjoyable and often free that you could be doing instead of shopping and wasting money.

18. Review your credit card statements 
In order to break the debt cycle and get your finances back on track you need to establish where you are spending your money and wracking up debt. Check your credit card statements monthly and analyse them. When you know where you are spending your money you can become more mindful and take action to stop it. Is it at Kmart on clothing and homewares? Are you spending too much on eBay or Amazon?  Are they stores you are visiting in your breaks for something to do? Is your spending occuring on the weekend because your friends work and you don’t know what to do with your spare time?

Work out where you are spending and place yourself on a ban of going to that shop or buying from that shop online for a month. Just pick one spending problem area. If your weakness is buying makeup avoid shopping for any new make up for that month and see how you feel after a month. Maybe you can stretch it out for two months without too much pain. Then you can add another store to the ban list until you can retrain your mindset to shop as you need things not as a past time or unconscious purchase.

What are your debt goals? Do you have a plan in place to break the debt cycle? Are you using the debt snowball method to pay down your debt? Share your goals and wins to achieve financial freedom below 🙂

Don’t forget to sign up to the Minimise With Me Mailing List for your free copy of my ebook “101 Ways to Save Money Whilst Still Living Awesomely!

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Minimalism

The True Cost of Our Stuff

Often when we shop our main decision basis is one of price. We review the price tags as well as asking ourselves questions like; is it on special? Does it come with something free? Can I get two for one or buy one get one half price? We assume that we are frugal or budget savvy by considering these price points before purchasing. The issue is that this often means that the true cost of a purchase is not considered.

When we only consider these price points in the decision making process for new purchases we forget the most important costs. One of the prime and irreplaceable costs being – our time. One of my favourite quotes is from Minimalist blogger Joshua Becker from Becoming Minimalist. He says “We don’t buy things with money. We buy them with hours from our lives.” A thought I try to be conscious of this each day.

Before we head out to the shops, or to buy something online – or anywhere, we need to consider a few things. Not just the money spent to make that purchase, but the investment of time involved in owning something. This assessment allows us to truly make wiser purchasing decisions and to consider the true cost of our stuff.

There is much more that needs to be considered than just price alone. Here are 7 other things you should consider when making purchasing decisions to assess the true cost:

  1. Lack of mobility

When you consume excessively your rob yourself of future opportunities. What if a new position came up interstate that would be perfect for you but because you have a huge home filled with stuff you can’t move. What if you find the perfect rental property and you need to be out in a week but miss out because you can’t physically pack up all of your stuff that quickly. What if you need to sell your house whilst the market is booming but you take three months to declutter and pack your stuff and during that period the market drops suddenly and you lose thousands in the lost market price? Having too much stuff can hold you back from decisions that make you happy and add to your life and stop you from being mobile when you need to be.

  1. Environmental Cost of Excessive Consumption

When we consume in excess we increase our impact on the environment. Everything you buy comes with packaging – boxes, plastic, tape, tissue paper, foam and other stuff that will quite possibly end up in landfill. Not to mention the cost on our natural resources. Clothing manufacturing uses vast amounts of water and chemicals. The more we buy, the more our valuable resources are depleted and the more waste we create.

This impact is often not seen by the consumers but born by the wildlife and locals who live in the areas of manufacturing. Check out True Cost on Netflix for a great documentary on the environmental and human cost of our fast fashion industry. 

  1. Opportunity Cost

This is the cost of what you could have done with that money had you not spent it on a new outfit or tech gadget. Instead of buying more stuff you could have invested that cash in yourself such as; by starting your own business, signing up for an educational course, contributing to your retirement, going on a holiday, paying off your mortgage or other debt. All these things have the potential to greatly improve your circumstances.

When people reach the end of their lives the common regret is not wishing they bought more things over there life times, but wishing they would have spent more time with family and friends and traveled more. There would be more time to do in our younger years if we stopped working more and more to buy things we don’t need. Rather than spending our hard earned cash on more stuff, we should consider the true cost – the opportunity costs of spending that money on stuff which could have been redirected to save for our future and retire earlier and have more time to spend with the people we love, doing things we truly enjoy!

  1. Less time for your important relationships.

Whilst you are spending all Saturday morning cleaning your large home you’ve missed out on brunch with a friend, going out with the kids on a road trip, a morning walk with your wife.

The more stuff we have the more time we invest in cleaning it, maintaining, repairing not to mention the other stuff we don’t think of – the time we spend unpacking and setting it up, the time we spend reconciling our accounts each month, filing our receipts, finding a place for the item, washing it, moving it to dust or vacuum. The list goes on.

When buying something new ask yourself what is the true cost of this item? Are you prepared to spend the extra time to look after this item, dust it regularly, iron it weekly, pay for maintenance costs, take it for repairs when necessary and so on.

This goes for buying a house. A house is one of the biggest drains on your time. Consider whether you really need a two story mansion for you family of three or if you would rather spend the time you would have spent cleaning each weekend with your family not to mention the extra work hours needed to cover the larger mortgage.

 

If you like this article you may also be interested in reading “10 Benefits of a Minimalist Inspired Life“.

 

  1. The Cost to Our Health.

The more we spend, the more money we need to bring in to stay ahead and on top of our debt. Maybe you are working 80 hours a week to bring in the big bucks to keep up with your spending. As a result of overworking you get home too tired to spend time with your family or do anything for yourself like exercise or read a book. You begin to live for the weekend with Monday to Friday just being a blur of alarm clocks and falling asleep on the couch.

Not only is your health suffering from lack of time to exercise, cook a nutritional meal and relax after work but you will be carrying around a lot more stress if you are living pay-cheque to pay-cheque. This can soon escalate if you are constantly worrying how you will meet your bills and debt repayments each month. Many people are reaching retirement age saddled with large consumer and mortgage debts without considering the consequences if they suddenly have to retire due to health concerns.

  1. Anxiety and Stress Caused by Excess Clutter

Having lots of stuff adds stress and anxiety into our lives even if we are not aware of it. Clutter makes it difficult to relax physically and mentally and can make it an embarrassing time if unexpected guests rock up. Not to mention the added stress of not being able to find things, having to step over things constantly, pick up things endlessly to tidy up, or seeing cluttered spaces every time you open your drawers or wardrobe. The clutter is always there to remind us. This stress can be reduced by minimising your possessions and limiting what new items you bring into your home. Having space in your home, a sanctuary that you love can do wonders to alleviate stress and anxiety.

  1. Missing Out On Valuable Experiences

When we become so obsessed with buying more and more stuff we often miss out on the important things in life like experiences. How many people do you know that have never been on a holiday but easily spend money on other things without much thought – their nails, a daily coffee, an expensive car, new jewellery or outfit for a party. They constantly say I can’t afford to travel and yet don’t realise that if they were just a bit more intentional with their spending that they too could go on an occasional holiday. Whether it be a local one, interstate or overseas.

It doesn’t even have to be a holiday. Maybe they want to go to a fancy restaurant for their anniversary but can’t afford it. Sometimes we place more value in things that we can see and hold and keep and hold onto for years and years and we forget the importance of creating memories with loved ones. If you just saved $20 a week – just 2.5% of a $50000 annual after tax salary, you would have over $1000 saved with interest to invest in an experience that is important to you. It could be a weekend away, spa day and nice dinner and only takes a very small sacrifice each week.

Have you identified the true cost of stuff in your life? What changes have you made since to your purchasing choices? Share you comments below 🙂

Check out How I Discovered Financial Freedom Through Minimalism for more benefits on focusing less on our stuff and more on what is truly important to us.

Minimalism

How I discovered Financial Stability Through Minimalism

What if I told you there was a whole new way to financial stability that you may have not yet heard or considered? You might say something in reply like ‘Well, I’ve tried everything and there is no way I can get ahead’ Or ‘I don’t earn enough to save or have any financial stability’. But don’t fret!

What if I could show you that there was a way to get your finances in order without having to save every cent. Without living miserably whilst trying to keep your head afloat financially. Hoping that one day you would land a better paying job or win the lotto and your financial problems would be solved. A lifestyle where you could buy that expensive insert quality material possession you’ve wanted guilt free with a bit of forethought.

A couple of years ago, I stumbled across the term Minimalism by accident. It was during my lunch time Pinterest scroll where a few Pins came across my feed. I’d never really heard of ‘Minimalism’ before and wanted to learn more. I started to read the first post I came across. Then another and another. I became infatuated with the idea of living a more intentional life, reducing the excess to focus on the essential. Not long after I was reading and watching everything I could about the Minimalist lifestyle. What I didn’t realise at the time was how much this would have a positive effect on my financial stability.

Fast forward a couple of years to the present as I am typing this article. Minimalism has allowed me to change my whole relationship with money. I’ve always considered myself a frugal person that budgeted and saved and was keen to stay out of debt as much as possible. Those are all great financial habits and helpful to get to a point of financial stability, but I now see the missing piece of the puzzle. Through Minimalism, I have developed a more intentional approach to my finances and even more foresight for my financial future than ever before.

In the past most of my financial decisions were based on a price basis. I’d ask myself questions like – Was what I was buying a good price? Was is it on sale? Good questions by all means but they weren’t getting to the heart of the spending issue. Minimalism has opened my thought process up to a whole new dimension of financial decision making.

Instead of being focused just on price, I now consider other aspects of the purchase. These include asking myself questions before spending my money such as; is this the best use of my money? Could something I already have do the same job? Could I borrow this from a friend or family member if I only need to use it for a short amount of time? Is this something that will last me and be a quality product? Could my money be better utilised elsewhere?

The Minimalists define Minimalism as a tool that allows you to make decisions more consciously, more deliberately. To live a minimalist life to me, means living within your means and living more intentionally, getting off auto-pilot and reassessing your daily interactions and decisions. This I believe, is the key to financial stability. It doesn’t matter if you are earning a six figure salary and are spending more than six figures or only on a small wage. Minimalism can be used to help people on any income at any point on their financial journey.

I have found Minimalism a great tool in many areas of my life and one that can greatly add to your financial health. Here is How I discovered Financial Stability Through Minimalism.

  1. I trust myself to plan for the future.

I know that I will, through everyday actions, be thinking of ‘future me’ and how I can ensure ‘future me’ is not left behind at the expense of ‘today me’. This gives me confidence to know that my financial future will be one of stability as I have plans in place in order to prepare for any financial emergencies that may present themselves unexpectedly.

  1. I consider the bigger picture in decision making.

Minimalism has taught me to consider each purchase and take pause. Every purchase is well thought out and intentional. If I’m in kmart it’s because I’ve already made a list of what I need or want, where I am buying it and asked why I am buying it, and where it’ll be stored in my home. The temptation to impulse buy is reduced when you have to stop and think about your purchase decisions more thoroughly. The less I am buying on impulse, the less I will have to deal with buyers remorse and the shopping hangover that comes after a shopping binge.

  1. I no longer feel the need to impress or keep up with others.

Minimalism has taught me to appreciate what I do have and shown me that I don’t need to make decisions to impress others. Being more aware of what truly makes me happy gives me financial stability and the financial freedom to make decisions for the right reasons, not to impress others.

Not everyone has the same financial circumstances and bank account balance as you. No one knows what everyone’s personal financials are and we shouldn’t be blindly trying to keep up at the expense of our own financial stability. If you want something and can afford it, that’s great, but don’t do it because of some need to impress others.

  1. You’re more aware of your needs vs wants.

We bought our first home in our mid 20s, assuming at some point in the future we’d need to upsize when our one garage home with small rooms and one bathroom started feeling claustrophobic. Since discovering minimalism, instead of upsizing to a larger home, we donated, sold and cleared over half our our possessions.

Rather than getting a bigger home (and mortgage to go with it) we’ve stuck with our humble abode that is the perfect size for us. Sure, it might be nice to have some extra space and a more modern home, who doesn’t want that?! But we would rather have a smaller mortgage we can comfortably afford to pay.  And even better, being able to afford additional payments means we can be debt free earlier and that is more important to us.

  1. Seeing the importance of planning for unexpected financial disasters.

Before I discovered minimalism I maintained a small emergency fund and always made sure that if the car broke down or the hot water system blew we wouldn’t be stuck. There was some foresight to tackle any small potential disasters. But it was through discovering minimalism that I discovered a whole new level of financial stability.

I learnt how important it was to forgo temporary joy in the present for my future financial stability. This includes saving up three to six months of expenses to prepare for even bigger hiccups such as the possibility of a job loss. Having a goal to get an emergency fund of three to six months of expenses is no easy feat, but certainly adds a level of financial security.

If you were to lose your job tomorrow with a few months of pay stashed away, it would still be an unexpected development but one that you were prepared for. This emergency fund could give you the time to find a new job without worrying how you will pay your bills or put food on the table.

  1. I value my time and money more

Minimalism has taught me to value my time and money more and that means finding ways to spend my hard earned cash more efficiently. Like looking for new ways to decrease my expenditure and therefore hours required to earn that money, without necessarily decreasing my spending. Spending time to find discounts on bills such as insurance, registration, utilities, and phone bills which can add up quickly in your budget and often only require a quick call or online quote.

I save time by automating my saving transfers and ensure my money is transferred to a separate savings account before I am even tempted to spend it.

Each small investment of my time to reduce expenses not only decreases the time I need to spend working to earn that money, but also better manage my money so it can be better utilised and contributing to my financial stability.

  1. Minimalism frees up time which can in turn increase your savings.

In addition to the above point, one of the biggest benefits of minimalism is finding more free time and using it more efficiently. When you spend less time organising, cleaning, maintaining stuff and less time shopping for things you don’t need, you open up time to dedicate to more value adding activities.

This could include freeing up time you might have spend at the mall that you can now dedicate to reviewing your budget and analysing your expenditure to check in with your finance goals and to be more in control of your finances.

It can also free up time that might otherwise have been wasted. This could allow you to take up a side hustle to bring in extra income to further contribute to your financial stability.

  1. My debt appetite has been re-routed.

Minimalism has helped me to become more aware of how intrinsic debt is in our society. People will pay out their car loan and not long after they are going out to buy another car with another hefty loan. They are so accustomed to having a debt repayment they haven’t even considered what else they could be doing with their money if they were just willing to hold onto a slightly older vehicle. I am now even more unwilling to go into debt than ever before and focused on reducing my current debt as quickly as possible.

Having less credit card debt, or any other kind frees up your cash to invest in your savings account and allows you more financial freedom to plan for the future. If we don’t have cash for something we don’t buy it. Our emergency fund also helps ensure we never have to rely on a credit card for unexpected costs.  

  1. Minimalism encourages living within your means.

If you are not living within your means, your income is less than your expenses and you are going to end up going into debt to fund your lifestyle. Minimalism has shown me that it is possible to save and have financial stability despite the level of income, if I choose to live within my means.

Just because you earn six figures doesn’t give you the ability to be financially naïve and ignore your incomings and outgoings. Nor does it mean someone on $40000 can’t have a savings balance. By working out your income and expenses for the pay period and planning your budget, you can ensure that you aren’t spending more than you earn.

  1. Always asking is this the best use of my money?

Minimalism has taught me the importance of re-evaluating where my money is spent and asking whether that is the best use of my savings and income. It has shown me the importance of acting in the best interest of my goals.

Maybe you want to go on a trip to Europe next year but your friends want to go on regular shopping days. Or your friends asked you to go out for an expensive night of bar hopping that is going to blow your entire weeks spending budget. Minimalism reinforces how important it is to make intentional decisions each day to reach your goals.

Being more intentional about how I spend my money has helped me reach financial stability. Don’t be afraid to say no to an event or suggest alternate budget-friendly plans if something is going to put you in a financial pickle. Being open honest with friends and family can make this easier. If they understand your goals and why you are savings I’m sure they will be happy to make more budget friendly plans that can involve you.

Have you discovered financial stability through Minimalism? Please comment below and share your experiences!

If you loved this you may also enjoy reading 10 Benefits of a Minimalist Inspired Lifestyle.

Budgeting

How the Debt Snowball Can Get You Debt Free Faster

There is no faster ticket to financial freedom than being debt free. Having  debt can weigh us down and keep us from making changes in our life for the better. Whether that be freeing up money to add to your retirement savings, taking a new role that you love but that involves taking a pay cut or even the improvement in your health from the reduced stress that comes with being debt free.

About a year ago I came across a book called the Total Money Makeover by Dave Ramsey. It was here that I first came across the Debt Snowball Method for reducing your debts. I’d always considered focusing on the interest rate the smart way to go about debt repayment. It seemed more financially savvy to me to focus on the dollars involved and interest saved. If you are paying more interest on one debt over another, why would you pay the one with the lower interest rate out first? Since discovering this new method I can see the advantage in paying off debts from the lowest to highest balance over focusing on the interest rate.

Paying off debts is a hard slog. When you see how many years and repayment periods are left it may seem like there is no light at the end of the tunnel and you will be paying them off indefinitely. The key to the debt snowball is building momentum. Building new habits is tough and we often need instant rewards in order to keep us working towards out goals.

When we want to lost weight we join a gym and closely watch the scales. It can be hard to stay motivated when those scales don’t budge in the beginning. If you lost a kilo that first week, it would help you stay focused and more determined on your weight loss journey. This is why the debt snowball can be so effective at helping you get on top of your debt. It focuses on knocking down the smallest and easiest debts to tackle first. With each debt repaid, you can see your progress a lot sooner than if you attempted to pay out a much larger debt just based on the fact that you were paying a higher interest rate.

>> If you like this post, you’ll love: “10 Easy Tips Save Money Groceries Budget“<<

Before I go into the debt snowball method I want to mention another step that is equally important before starting your snowball.

BUILDING AN EMERGENCY FUND

Before attempting the debt snowball it is best for you to save an emergency fund. Dave Ramsey and a lot of other finance experts recommend having and emergency fund of $1000. I would suggest going a little bit further and aiming for $1500. In my experience if your hot water system goes or your car dies and needs an expensive repair $1000 doesn’t always cover your emergency costs. Just having that little bit more will give you piece of mind especially if two emergencies rear their head at the same time!

This $1500 is a reasonable savings buffer to help you in times of emergency when you would normally throw those amounts on your credit card. There is no point trying to pay down your debt if you are going to be wracking them up again and living paycheck to paycheck with no plan for unexpected expenses. You’re just going to end up back where you started.

And let’s face it, there are always going to be budget emergencies. Just like it rains on the weekend, there are going to be rainy days where your best intentions to budget are going to take a hit. Do what it takes to save up your $1500 emergency fund and ensure that it is only used for emergencies. If you have to dip into it because your had to replace a tyre or you have a dental emergency, the money will be there for you. Just be sure to save up your emergency fund again as soon as possible.

Once you have saved your emergency fund you can move onto your debt snowball.

THE DEBT SNOWBALL

With a few minutes of planning you can be well on your way to paying down your debt. Here are the four steps to use the debt snowball method:

Step One:

Write down all your current debts in an excel worksheet or piece of paper (Exclude your mortgage, this will be tackled once you have paid back all of your consumer debt and saved a 3-6 months expense fund). Go back to your loan paperwork, online banking or credit card statements and work out what your current debt balances are for all outstanding debts as at today. Then, take note of what rate of interest you’re paying (for full awareness of your debt) and your monthly minimum repayment.

For the Australians out there, getting a current HELP loan debt statement is not possible as these are only sent out annually with your tax return. Instead, enter the HELP balance that was on your most recent Tax Assessment paperwork and make a note to update this when you get your next one.

Step Two:

Once you have written all your debts down, number them from  1, 2, 3 from the smallest balance to the largest. Debt Number 1, the smallest debt balance will be the one that you are going to pay off first and attack with your debt snowball. The last and highest debt balance will be the last.

Work out based on your current budget, how much extra on top of the minimum repayments you can afford to put on your smallest debt for that month. If your lowest debt has a minimum monthly repayment of $25 and you can spare another $100 a month, start paying the $25 minimum repayment plus the additional $100 repayment, or whatever it is that you can afford.

Continue to pay Debt Number 2, 3 and so on as minimum repayments. Continue to do this until Debt Number 1 is full paid off. If you get any additional income, a bonus for example, or you were under budget for the month putting that extra money as an additional top up payment on your Number 1 debt will help you knock it down even faster.

Step Three:

Once your smallest debt is repaid, take the minimum payment for Debt Number 1, in the example above, that would be $25 a month and add your additional repayments of $100 a month and add this to the minimum repayment for Debt Number 2 – your second lowest debt.

This means you will now be paying a much larger amount on your second debt – saving you significantly in interest and getting you to your debt free goal much quicker. If your monthly repayments for Debt Number 2 were $40 you will now pay the minimum amount of $40 plus the $25 and $100 you were using to pay of debt number one. Continue to do this until debt number two is paid.

Step Four:

Continue to do this for each of your debts in the snowball until the last one is paid off. For each new debt paid off you will be taking the past minimum repayments plus your additional repayment and carrying it forward to the next debt in your snowball. Like a snowball, the repayment for each will grow and pay off a bigger chunk of each debt as it grows and moves to your next biggest balance.

There are no short-term solutions to paying off debt. It is going to be a slow and difficult journey but one that will be well worth it. Imagine all the things you could be doing with your cash if you were debt free. Put a deposit on a house, go on that dream six month holiday. Maybe you want to start your own business or invest for your retirement.

Keep these dreams at the forefront of your mind! Every time you feel like giving up ask yourself if you are willing to give up on your financial dreams.

STOPPING THE DEBT CYCLE

Here are some tips to help you stay out of debt and to help you get to your debt free journey sooner:

  1. If you can’t afford it don’t buy it. Are you about to buy something on the credit card? Stop! Whatever you are buying you are paying a 19% interest amount on top each year that balance is left unpaid. Does that sale price look so good now?
  2. Cut up your credit cards. If you are the kind of person that can’t resist a good deal and doesn’t pay your credit card off in full each month it is time to cut those cards up!
  3. Stop trying to impress others. No one cares what brand clothing you wear. People are too worried about their own lives to focus on your daily outfit choices.
  4. Learn to be content with what you have. Do you really need a brand new $35k car on finance on your $50k salary when your current car works perfectly fine? Are you willing to pay x dollars every month for the next 60 plus months? In good times and bad – when you are unemployed, when you are trying to live on one income, when you decide to cut back hours at work to study for a new career – that debt is going to still be there.
  5. Stop going shopping! It’s surprising how little you spend when you avoid going to the shops unnecessarily. If you have endless emails from clothing shops or stores that tempt you unsubscribe from them! Instead of going shopping, meet a friend for coffee, read a book, watch a movie. There are plenty of hobbies that are much cheaper and more valuable uses of your time.

For tips on saving more money to help you free up cash for your debt snowball check out 11 Everyday Tips to Save Money.

What are your debt goals? Do you have a plan in place to become debt free? Are you using the debt snowball method to pay down your debt? Comment below your goals and wins to achieve financial freedom below 🙂

Budgeting

11 Everyday Tips to Help You Save Money

Sometimes finding ways to save money can seem too hard and an impossibility. You research tips and  think to yourself how is saving $12 a month on bank fees or a few dollars on a coffee really going to have any impact on my savings? How will that help me get on top of my debt or save for a holiday? It may all seems like too much effort with limited results but it is important to stay focused on the bigger picture.

Savings can be found anywhere you spend your money. In order to find them you need to look at where you currently spend your money and get creative about ways to reduce those expenditures. Often it could be as simple as a phone call to ask for a better deal or taking ten minutes to research something a little bit more before hitting the buy button. Becoming complacent about spending can end up with us losing $100s or $1000s of dollars.

Here are 11 Everyday Tips to Help You Save Money. Each one alone may only give you a small increase in your savings, but together they can make a big different over the space of a year and the less money that comes out of your pocket day to day the better for your savings account and future.

1. Review insurance annually

Shop around for all insurance bills annually. Insurance can increase significantly year to year and most companies will take advantage of loyal customers who don’t put the time in to compare what they are being charged. Most insurance companies offer quick online quotes and allow you to alter the market value and excess coverage in order to get a true comparison. Within minutes you can have a few price comparisons for the insurance you are renewing and be well on your way to save money.

I’ve often saved hundreds of dollars doing this and for each insurance type over a year the savings can significantly add up. Do this for your car insurance, home and contents and any other insurance you purchase and it can easily save you hundreds of dollars or more a year. Another option is to call your insurance provider to ask if they can make you a better deal.  

2. Only shop when you have something specific in mind

Avoid going to the shops unless you specifically need something, particularly if the only reason is because you are bored. Make an ongoing list in your phone or planner of what you need as you think of it and take your list with you on your next trip to the shops. Sticking to a list will allow you to limit your shopping to specific stores and aisles, helping you avoid temptations of items not on your list. Not only will this help you save money but also save time, allowing you to use your time more wisely and create more space for more value adding activities.

3. Shop around for mobile phone plans regularly

Phone bills can add a significant cost to your annual budget. To save money shop around for phone plans, particularly if you are on a no lock in contract arrangement and have the flexibility to move around. Phone companies are always updating offers to attract new customers and if you haven’t researched in the past twelve months what offers are available to you, you may be losing out on some amazing savings.

By changing my phone provider, I was able to take up a 6 month phone plan for new customers that was half the price I was paying to my current provider for the same inclusions. This added up to a saving of $210 in the first year. It may not sound like a lot but that saving alone covers my gym membership for the next four months and that is definitely money better spent on my health. 

4. Limit dining out

Limit eating out where possible. If you do want to go out, buy the meal you most prefer to eat out whether that is breakfast, lunch, dinner or dessert. For me personally I can easily make toast or pancakes at home so I would rather use my dining out budget to pay for dinner which is something much more time consuming for me to create.

For dessert, often instead of going out and paying $30 on top of our dinner bill, I’ll opt for an ice cream at the movies or occasionally have some store bought waffles on hand in the pantry which comes out much cheaper and certainly doesn’t seem like a sacrifice to me! If you have a dinner outing that you don’t want to miss, opt for one of the cheaper menu items so you can socialise whilst avoiding blowing your budget. Alternatively, staying home and making dinner with friends or your partner is always a good compromise.

5. Reduce one of your regular expenses 

What do you buy regularly? Is it coffee? Chocolate? A soft drink at lunch? Pick one expense you buy regularly and try and reduce your spending on that one item. If you love coffee, buy a good quality coffee to have at home and bring your reusable coffee cup out with you. Can you bring in a bottle and have water at lunch instead of spending $4 daily on a coke? Could you cut back on buying the pricey vending machine chocolate on your afternoon tea and just bring some from home? Even if you just cut back slightly, or even make small reductions to two regular expenses that will give your savings a kick start.

6. Create a wish list with a wait period

Sometimes we don’t even realise we are making impulse purchases and taking a step back, or waiting a few of days to think about a purchase can help us be more intentional with what we are buying and bringing into our homes. Creating a wishlist is a great way to think about future purchases. When you come across something you want to buy, write it on your wishlist and try and wait a period of time such as 30 days before buying the items you have listed. This will help you to avoid impulse purchases and make more informed decisions.

A wishlist allows you to truly assess whether this new purchase is needed, if it will add value to your life and whether you want to part with your hard earned cash in exchange for it. It also allows you time to consider other products, look into reviews, ask friend for recommendations and do price comparisons to make sure you are getting the best product for your needs at the best price.

Your wait period can start small and you can gradually increase it to what suits you. To begin with, set a goal to walk away from the shop, say to yourself if I really want this I will come back to buy it before I leave. If you still want the item when you are ready to leave you’ll make the effort. Making educated purchases can help you avoid suffering any buyer’s remorse, having to go through the hassle of a return and save you any disappointment in your purchase.   

7. Review your utility plans

Have you been paying your utility bills on autopilot without reviewing what plan you are on? A quick call to your service provider can save you hundreds in a matter of minutes. Buy contacting my utility provider I was able to switch to a new plan that offered a 16% discount for on time or early payment. A quick ten minute phone call has added up to hundreds of dollars of savings that have helped us to save money and signficantly reduce our utility bills.

8. Unsubscribe from store mailing lists 

We are constantly exposed to advertising whether it be on the radio, TV, Youtube, or when we are checking our email. My inbox seemed to constantly be filling up with new sales and offers from stores and became and unnecessary distraction. Unsubscribe to your unwanted shopping email subscriptions as they come into your inbox. When you aren’t being informed on sales 24/7 you will reduce the desire to go shopping and buy unneccesary things as well as the fear of missing out. Instead of having advertisements telling you what you need to buy, you can be more intentional and only add to your wish list things that you need.

9. Stop paying ATM and monthly bank fees

No one likes paying bank fees, there is no benefit to us for these costs which makes this area a great place to start to save money. Learn where your banks local ATMs and stop withdrawing cash at other bank tellers. Each withdrawal is at $2.50 or more which does add up particularly if you are only withdrawing small amounts. Think ahead or pay by card where you can. Consider getting a card like ING’s Orange Everyday Account which gives a 100% ATM fee rebate.

Another expense that adds up are monthly bank fees. Contact your bank and ask them to wave fees on any bank account that you deposit $1000 or more into each month. If you are being charged monthly bank fees on your mortgage consider changing your home loan to a fee free one or asking for those fees to be waived. These small banking fees add up month to month and are much better in your bank account.

10. Review your super accounts

Do you have one superannuation account for every job you have had to date and have yet to consolidate them? Each superannuation account pays out management and insurance fees and if you are paying for these twice, or more, you are throwing away a large chunk of your retirement savings.  Consolidating your super is a lot easier than some might think. Most super funds just require you to fill in a Consolidate Your Super form and will contact your other superannuation fund to transfer your balance into your new account on your behalf. It may seem like your retirement is a lifetime away but every dollar you can save today is going to make your life a lot easier in the future.

11. Sign up to your local library

I recently joined my local library after hearing about the access to borrowing eBooks and audio books. I never go to the library, but could not pass up access to free ebooks and audiobooks on my phone. You only have to go to the library once to sign up and after download the OverDrive app you can borrow ebooks and audiobooks for free without having to leave your chair. I’ve listened and read countless audio and ebooks this way. If you aren’t too set on only reading physical copies this is a great way to read more and save money on buying books. They might not have every book you are after but any access to more books is a good thing.

Do you have any tips to save money that have worked for you? Please comment below to share with other readers.

Budgeting

10 Easy Tips to Save Money on Your Groceries Budget

Grocery shopping can make up a big portion of the weekly family budget. If you are not aware of your grocery spending habits those supermarket trips can easily add up significantly in a short space of time.  Here are 10 easy tips to save money on your groceries budget that can help you plan ahead and that can quickly add up to some great and easy savings on your grocery bills.

1. Always bring a list with you and stick to it

Save money on groceries by having a shopping list on your fridge. This is my number one tip to save money on your groceries budget! When you are out of something, write it down and by the end of the week you’ll have a list of things to buy that you actually use. Avoid walking into a supermarket unprepared! Once you are in store, resist adding to this list with impulse purchases by completely avoiding aisles that don’t contain items on your list.

2. Resist buying large quantities of new products

Avoid buying new products or if you can’t resist, only buy one to try it out first and see if you like it to avoid ending up with multiples of a new grocery item that you may not like. We quickly learnt that often new food or products we would buy on sale were more often than not left unused and taking up space in our pantry or cupboards. Sometimes it is best to stick to using our trusted and preferred brands of products to eliminate waste.

3. Shop online to help resist impulse purchases

Do your grocery shop online when you can. It’s easy to see what products you regularly purchase are on sale and helps you streamline your grocery list. I grab my shopping list, sit down for ten minutes and order what is on that list and pick it up at a convenient time or get it delivered. Not being in the store means you avoid additional temptation to make unnecessary purchases and helps you stick to your budget.

4. Buy only what you need and avoid excessive bulk purchases

Don’t overstock on sale items. Just because something is on sale doesn’t mean you need to buy a year‘s supply of it. Most popular items go on sale on a rotating cycle every 3-5 weeks so you needn’t be preparing for the apocalypse! You’ll often find when you do stock up on items like soft drinks and chocolates, you’ll end up consuming the items faster than if there was a smaller supply. Keep in mind how much you need when shopping. If you only need two tomatoes for a recipe and don’t plan on using tomatoes again for another week don’t buy the bulk pack just to make a saving on the per kilogram price. I’d rather pay a bit extra for two tomatoes per kilo that I ended up using, than binning and throwing away a lot more in wasted food and money.

5. Store food correctly to prolong life and reduce waste

Learn how to store food correctly in order to prolong it’s life. Some food such as potatoes and onions should be stored separately, tomatoes ripen better out of the fridge and herbs thrown into a glass of water will last a few days longer than in the fridge. This will ensure you get as long out of your fresh produce as possible saving you another trip to the store and money continually buying the same things when they have gone bad earlier than they should have.

6. Save with DIY Cleaning products

Reduce cleaning supply bills by making your own DIY cleaning products for a fraction of the price as well as limiting the cupboard overflowing with different products for each cleaning task. Bicarb, dish washing liquid, water and white vinegar alone can clean most areas of them home as well as help reduce the chemicals used inside the home. Cleaning products can contribute a huge portion of your grocery bills and can be a great way to save money on your groceries budget. 

7. Switch to machine washable cloths

Switching to machine washable microfiber cloths can helps save endless dollars on dish cloths. A pack of microfiber cloths can be obtained for $5-10 and can be washed again and again to save your replacing clothes regularly. Simply use and put in a wash cloth pile to wash once a week. Other savings tips for cloths is to soak them in vinegar and heat them in the microwave for a couple of minutes to kill bacteria or to throw them in with your dish washing
cycle once a week.

8. Meal Plan 

Meal Planning can be an easy way to save money on groceries. Base your shopping list on what meals you could make with the ingredients you currently have in your pantry or fridge. Add any additional ingredients required for those recipes to the shopping list. If you’re buying something that will not be used up in one meal, incorporate the left overs into your next meal so you can avoid food waste or freeze remaining portions where possible for next time. Ten minutes a week meal planning can save you hundreds over the year and drastically help reduce food waste in your home.

9. Research specials online or in catalogues prior to entering the supermarket 

Buying more expensive items such as beverages, beauty and cleaning products can add up over time when paying full price. In order to easily save money on your groceries budget, check out the weekly catalogues for your local supermarkets. Make separate lists for your groceries based on what you are planning to buy in each and shop according to what store has the best price. This might take a little longer, but the savings can be very much worth your while. If you do online shopping this can be even easier where you can just order from different stores and get pick up or home delivery to avoid multiple trips. Alternatively, go to the shop when it suits you, it doesn’t have to be in the same day, if you will be near one today and another on the weekend grab what you need when it is convenient.

10. Pay attention to the ticket pricing per weight

In Australia, supermarkets are now required to include easy price comparisons on their pricing tags such as price per 100 grams. You can now easily compare various sizes and prices of similar products from the price tag on the shelf. This can be done much quicker than before when you’d be trying to work these things out in your head or with your calculator and can be an easy quick way to decide in store or online what is the best value for money product to buy.

Do you have any tips to save money on your groceries budget? Leave a comment below!