1. Record your Expenses
The first step to be able to cut out expenses is to record where you are actually spending your money. It can be quite an eye-opener: I realised I was spending $10-15NZD per day on buying my lunch rather than bringing it from home. You'd think I would have known that before laying it out on a spreadsheet, but I didn't realise just how much it added up to per week (up to $75!). Your online banking may allow you to export your expenses in spreadsheet form - this is a great way to get started as you can already see your expenses breakdown from the past year.
I take the time every evening to write down my expenses manually, as sometimes I pay for items with cash and it allows me to see if I stayed on budget each day.
2. Categorise Expenses
By putting your expenses into categories, you can easily work out how much money you are spending on food/accomodation etc per month and from there can work out how much you can cut down by. The main categories I use are accommodation (usually only rent), bills, transportation, communication (mobile phone, Skype top ups), groceries, medical and pharmacy, and other food/drink (that was not bought at a supermarket, eg. meals out, coffee to go etc).
3. Cut Back a Little More Each Week
This is where it starts to get difficult, but you can probably already see a few expenses that you don't need. Most people find that not buying as many takeaway coffees can make a big dent in their ongoing expenses - if you spend $3.5 per day, that's a saving of nearly $100 per month if you stop buying them entirely. Also reducing your budget for clothes and shoes can have a dramatic effect on savings. My advice is to scale back what you're currently spending in each category by $10 per week and see how low you can go.
A few tips for small savings that will add up are:
- Buy a cheaper version of supermarket products (a budget brand of pasta rather than the Italian brand).
- Make repairs and alterations to your clothes instead of buying new ones.
- Walk or cycle as much as possible instead of catching the bus.
- Upsize your meal: instead of a 6" Subway sandwich, get a foot long and save the rest for later. That way you get two meals for only a couple of dollars more than the small size.
- Bring snacks from home rather than buying them on the fly. That $1 chocolate bar may seem cheap, but it adds up.
- If your town has a farmers market, load up on your fruits and veges from there. It's often a lot cheaper than the supermarket (but do be prudent as some items are actually pricier than at the store).
- Refill your water bottle from the tap rather than buying a new bottle.
- Buy in bulk wherever you can. If you eat a lot of rice, buy a large bag rather than a small bag - it costs more initially but in the long run saves you money.
- If your computer/phone does something weird, ask your friends if they know someone tech savvy before taking it to a repair shop. Often a friend of a friend will be happy to take a look for free.
- Save money on your electricity bill by using hot water bottles and extra blankets in the colder months. Heating the house can get expensive, but heating up the electric jug isn't.
- Borrow movies from friends rather than going to the cinema.
- Buy hair cutting scissors from the pharmacy and cut your own hair. It saves a lot of money, especially for girls. You can find video tutorials on YouTube on how to do it.
4. Drink Less Alcohol, Smoke Fewer Cigarettes
Alcohol is expensive, especially when bought at bars. Cut back as much as you can, and whenever possible buy your alcohol from the supermarket to keep your wallet happy. The same goes for smokes. This tip will also benefit your health.
5. You Don't Need New Clothes
In the year-long lead up to my 2015 roadtrip, I went clothes shopping only twice: the first time for a few cheap tops that I needed for work and the second for a pair of winter boots as my previous ones were literally falling apart. Sure, it's fun to have new clothes. But you don't need them until you really need them. The same goes for bags - I saw a cute cream and pink bag in the store for only $40 but the bag I had still worked. It didn't look the best, but it was a fully functioning bag and I let go of the thought of purchasing a new one that I didn't need. If you can, repair clothes and shoes where possible to get more life out of them, even if this includes duct tape! Second hand stores are great places to go for cheap clothes that are new to you.
6. Learn to Cook and Eat Out Less
When I saw that my lunch expenses were really adding up, I looked into finding recipes for quick and healthy meals. Everyone has their own tastes so I recommend going online and finding ones that you enjoy. Then cook twice the amount for dinner and bring the leftovers for lunch. You can even cook all your meals in advance on the weekend and store/freeze them for the coming week. This not only saves a lot of money, it is also a way to eat healthier. When I don't feel like cooking, I still prepare my own meals. I do this in two ways:
- Mixing a tin of chopped tomatoes with a tin of red kidney beans or lentils and heating it up on the stove. You can also add frozen spinach to make it even healthier.
- Heating up mixed frozen vegetables as an accompaniment to a tin of beans or tuna. It might not be exciting but it is easy, cheap and good for you.
7. Don't Live a Life You Hate
These tips are to help you save for travel, but in the lead up to your superawesome trip, you still have to have some fun. If you really love to have a few drinks at a club with your friends every Friday night or need some retail therapy, then plan accordingly and reduce your other expenses to compensate. For instance, I do not buy the cheapest toilet paper, instead opting for the soft Kleenex brand as that is something I appreciate. Another is that I love to have a dinner out on occasion, so I plan ahead and reduce other expenses. We all need our creature comforts, and these are unique to every person so use your discretion.
8. Don't Be Discouraged
There will be days when you go out and buy that thing you wanted. You might not even think twice about it, and then feel guilty later. I'm here to tell you that this is normal and if you persevere you can easily get back on track. The most important things are to keep recording your expenses, keep trying to minimise them, and keep making adjustments to your budget.
9. Ask for a Raise
If you feel that you are putting in more work than your wage reflects, go out and ask for a raise. During my last job I got two raises, and both were because I asked for them.
10. Make Money Elsewhere
Selling your old clothes or books is an easy way to do this, but you can also turn a crafty hobby into an Etsy store if you are so inclined, or just sell to friends. If you like to make greeting cards or beaded bracelets, someone probably wants to buy them and will if you spread the word. If you can play an instrument, go forth and busk!
Do you have tips to add? Leave your thoughts in the comments below.
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