Is it possible to still save money while you’re paying off your mortgage? Too often we get into a situation where we don’t take control of our finances and end up living from pay cheque to pay cheque and our dream of going on a family holiday or even investing in our future just doesn’t seem possible.
There are ways that you can break that cycle however and still enjoy life while paying off your mortgage and saving for the future. It all comes down to having a solid financial plan and spending your money wisely so that you will have enough left to put into your savings account.
Most financial advisors will tell you that you should have at least 3 to 6 month’s worth of living expenses put away in a savings account as an emergency fund. This means that you won’t have to increase your consumer debt when emergencies do come up which inevitably they will.
Here are 5 tips to help you increase your savings and give you greater peace of mind about your financial situation:
1. Make A Plan
The first thing you want to do is work out where your money is going so that you’ll know where you can save on expenses. To do this you need to keep a running total of everything that you spend on a daily basis for about a month.
Then take a critical look at all your monthly expenditure to work out what you really need to spend money on or what you could do without or perhaps find cheaper alternatives.
The next thing you should do is create a spreadsheet of all your necessary monthly expenses including your bills, mortgage payments, car loan and credit car payments and of course, your living expenses. Now you’ll have a good idea of how much money you need each month to cover your expenses.
This will also tell you if you will have money left over to save. If you don’t, then it’s time to cut down on some of your expenses.
2. Cutting Down On Expenses
There are many ways you can cut down on your current expenses which can make a huge difference to your monthly spending. Let’s look at some of these:
- Shop wisely for your
- Try to only do a major grocery shop once a fortnight and only buy the absolute essentials that you’ve run out of in between
- Buy all your necessary staple items at Aldi – you’ll be amazed at how much you can save.
- Make a shopping list before you go out shopping after checking what you have in the pantry and the fridge. Make sure you stick to the list when you shop. There are some helpful shopping apps which you can download onto your phone which can help with
- Buy in bulk, especially if you find things that you use often, on special. For example if your favourite jar of coffee is on special, buy 4 jars instead of 1. You’ve just saved four times the discount and you won’t need to buy coffee again for a few
- Cook more than need for the evening’s meal and freeze the rest. Then, when you don’t feel like cooking and are tempted to order take away, you’ll have a ready made meal in the freezer that you can have instead.
- Save On Your Utility
- Check your electricity and gas bills regularly and see if you can find a better
- The same goes for your internet and phone charges. And avoid getting a new mobile phone on a monthly plan. You’ll end up spending way more in the long run. Try to buy your phone outright and then choose the plan that meets your needs without paying for things you don’t
- Get Rid Of Your Pay TV
- Pay TV services can cost you a lot of money each month and will certainly add up over the course of a year. If you subscribe to Netflix or something similar, you’ll still have access to lots of great movies and TV shows and it will only cost your around $10 per
- The same goes for magazine and newspaper subscriptions. You can read all the magazines and newspapers you want for free online!
3. Become A Savvy Shopper
There’s no need to pay full price for items like clothing, shoes, handbags or even things like cosmetics. Take advantage of the sales that seem to crop up constantly and only go shopping when you really need something.
Better still, shop online. You’ll find most major retailers now have online stores and you can check out their specials quickly and easily. This way you won’t be tempted to make emotional purchases when you’re in store and see something that you simply must have, even though you don’t really need it.
Another way to save on items like clothing and even furniture is to shop at second hand stores or on ebay. Quite often you’ll find really good quality items at ridiculously cheap prices. Plus you’ll be helping the environment by recycling instead of buying new.
4. Use Small Saving Strategies Every Week
While you’re in the process of reducing your monthly expenses so that you’ll have money left over at the end of the month to put into your savings account, you can use some small saving strategies on a daily or weekly basis. These will start to increase your savings, even in just a small way and will certainly add up over
- Set up an automatic transfer from your transaction account into your savings account of a small amount every single week. This may only be $30 – $50 but you won’t really miss it because it gets transferred automatically. This $50 equates to around $200 per month or $2600 of extra savings per
- Although most of us don’t use cash very often these days, there are some situations where this may be beneficial. A useful habit is to work out how much money you’ll need every week for incidentals like bread, milk and your takeaway coffee and withdraw that amount in cash. This way you won’t be using your credit card and you’ll save on interest. Then at the end of the week, if you have any cash left over, you can put it into a piggy bank and watch it grow.
5. Refinance Your Mortgage
If you’ve had your current mortgage for a few years, you might find that you can get a better deal if you refinance. Make sure you do your homework first to ensure that you will indeed be saving money if you do choose to refinance.
Then make sure that the money that you’ll save on repayments goes straight into your savings account every month so that you won’t be tempted to spend it.
We hope that you’ve found our saving tips helpful and that some of these strategies can work for you. Follow our tips and soon you’ll see your savings grow and you can have that family holiday after all.