All to often as the clock strikes midnight we find ourselves in a strangely familiar predicament… to have a New Year’s resolution, or to not have a New Year’s resolution (that is the question). Around these parts we think any time is a good time to get your ducks in a row, especially when it comes to your money.
Don’t worry, we know these resolutions can sometimes seem unachievable. Just remember from small things, big things grow. Even if you do blow a little extra cash on a night out or an expensive dinner it doesn’t mean your budget dreams are out the window. Each new day is a chance for you to simply pick yourself up and start again.
Here are some tips to set yourself up for success when tackling this year’s goals and how you might even be able to earn some extra cash on the side!
Learn to do-it-yourself
One way to spend less is to learn how to cook and entertain at home. Eating out every night can be one of the most costly things you encounter if it becomes a habit. Put aside a day to make lunches for the week so you can get it out of the way, or host a dinner with your mates to turn it from a chore into something genuinely enjoyable. If you’re feeling more adventurous than that, try your hand at gardening. Companies like the Sydney-based Milkwood offer weekend courses in permaculture that will teach you how to grow and maintain your own veggie patch, which can save you some serious cash while giving you all the more reason to invite friends around for your home grown meals.
If you think plumbing and mechanics are a bit outside of your skill level, taking better care of your house and household items including your car, will make a call to the handyman less likely, and help avoid the unexpected and costly bills that come with it.
Give up the frugal habits that don’t work
When you overpromise and try to save above your means, you can grow easily tired of the lifestyle and the slide back into poor spending habits is steeper. Things like eating two-minute noodles every night to save on food bills or leaving your card at home to avoid withdrawing more money when you’re out are not the best ideas. You’ll grow tired of how limited it leaves you and eventually, you’ll have a poor overall perspective of the experience of saving, making you less likely to stay committed and try again down the track.
Rather than jumping ahead to try and save the majority of your income in a short period of time, shoot for longer term goals and start with aims that allow you to keep the lifestyle you enjoy so you don’t have to make any sacrifices. It could be simply cutting down on eating out one night a week, or setting strict budgets on certain nights out; however small the tweak, developing these little habits can pay dividends in the long term.
Build an emergency fund
Often throughout the year, the things that sting the most financially are those unexpected dentist visits, haircuts, electricity bills or extra mobile phone data. No matter how hard you try, you can avoid what you can’t predict, which makes contributing to an emergency savings fund almost compulsory. Despite this, many people don’t have one.
The easiest way to organise this without it affecting your lifestyle too much, is to set up small, automatic deposits from your regular account to a savings account. Even putting aside $10 every week can help over the course of the year, and when you do get hit with a bill it almost makes it feel like a bit of a bonus.
Don’t live above your means
This is as basic as it comes, but it’s also the most important resolution you’ll need if you want to make a difference to your savings in 2016. Living below your means doesn’t mean you need to miss out on the things you enjoy, it just means consider where you money is going and make tougher decisions when it comes to the things you can and can’t afford. Consider letting go of the things that may be weighing down your bank account such as discarded gym memberships, and assess the services you still pay for but might not use like Netflix, Spotify or old magazine subscriptions.
Setting loose budgets (even just in your head) will help you navigate what this means for you in terms of the day-to-day and allow you to weigh up the wants from the needs. While you’re doing this, try to understand the full scope of your expenses. Things like phone bills, electricity bills and daily expenses like the transport card top ups can sting you if you’re not ready for them. At the end of the day, if you’re spending double what you’re earning, you need to reassess.