2020 was a year anyone could never have predicted. Never before has the concept of having an emergency fund been more meaningful to cover loss of jobs and income, and many people having to withdraw Super in order to stay afloat. Savings in years to come will be critical in order to build up those emergency funds and attempt to boost the Super balance again.<\/p>\n
I have set myself a big and bold audacious goal of not buying anything in 2021 (for myself) that is not a necessity (think stuff like deodorant or underwear). I am not a massive spender anyway \u2013 but I do love a good sale, and generally end up buying stuff that I really don\u2019t need, plus my COVID kilo\u2019s have resulted in having to buy bigger sizes (which I don\u2019t want to be a long-term thing) and as a result – cupboards overflowing with more clothes then I could ever wear.<\/p>\n
Over the holidays, I cleaned out the pantry and linen cupboards and kids\u2019 bookcase and cupboards \u2013 but still need to get to mine. But the goal will be clear out, and don\u2019t replace! No spending in 2021. Whatever I \u201cdon\u2019t\u201d spend – will be saved instead.<\/p>\n
I listed some of my basics below:<\/p>\n
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Know where your money goes and what you spend your money on \u2013 look at your bank statements \/ credit card statements and work out what you are spending on hard earned moola on, and where it can be better spent.<\/li>\n
Pay off your credit card debt as fast as possible. If you have multiple debts \u2013 see if you can consolidate this on a lower interest rate and pay if off as quickly as possible. Otherwise, pay them off using the \u201cdomino effect\u201d \u2013 choose the lowest balance, smash that. Once the first one is paid off, then you use the money you would have paid to pay that debt, to pay extra off the next debt and so on until they are all paid off.<\/li>\n
Start an emergency fund \u2013 like covering a major car repair, or if you become ill and cant work short term, or get made redundant (or a world pandemic hits ;-( ) this will be the funds that you can use to \u201csurvive\u201d without income or cover a once off large expense without any hiccups. The recommendation is at least 3 months of your expenses, but it all depends on what you are comfortable with.<\/li>\n
Save first – either a % of your income or a fixed amount. If you are saving a fixed amount and your income increases \u2013 make sure you increase that fixed amount to be in line with the increase in income. Don\u2019t save what is left over \u2013 or it will never be a priority. If you save first you will live on less.<\/li>\n
Automate that saving – Set up a direct debit into a savings account so that your savings are moved away from temptation straight away.<\/li>\n
Avoid impulse buying (this is my guilt! Hence the goal for 2021). Some suggestions are \u2013 avoid large shopping centres unless you really need to, don\u2019t take your credit card with you when you go out, this allows some \u201cthink about if you really need it, before you buy it\u201d, make a list before you go shopping and only buy what is on that list, don\u2019t shop when you are hungry.<\/li>\n
Its never too late to start and no matter how little or how much \u2013 every $ saved helps.<\/li>\n
Change some habits\n
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Invite friends over where everyone brings a \u201cplate to share\u201d rather than eating out<\/li>\n
Meet friends at the beach or park, take kids to free activities \u2013 like the museum or bush walking.<\/li>\n
Ditching your coffee will save $5 a day (work days 260 days, you will save $1300)<\/li>\n
Quit smoking or mid-week drinking \u2013 save $ and your health!<\/li>\n
Make ordinary things cheaper \u2013 take snacks, pack your own lunch, choose generic brands, carpool or cycle or walk to work. The savings will add up quickly.<\/li>\n<\/ul>\n<\/li>\n
Keep all your receipts for things that you can claim for tax and maximise your tax refund (or reduce the taxes you pay). On that note, save your tax refund each year rather then blow it!<\/li>\n<\/ul>\n
Don\u2019t make it all doom and gloom, give yourself a \u2018blow money\u2019 limit. You can use this for whatever you want to i.e., non essential purchases. This will allow you to remember that the splurge is not a daily habit, but has limits in place.<\/p>\n