Thursday, April 23, 2015

Mimi's Savings secrets...10 tips for painless saving...

 
We get tricked into thinking that the only way to 'save' is to physically put money in the bank, but there are other ways to go about it.
 
I don't know about you, but I've never been good at 'putting money in the bank'. It just sounds like a chore, and more importantly, one I never get around to doing. Instead, I challenge myself constantly to see how much money I can leave in the bank. It's a subtle difference that works for me.
 
I call it 'Remainings' not 'Savings', as it's about how much remains in my account.
 
So here are a few little tips from me. None of them earth shattering, but simply a sharing of what works for me, and will maybe work for you too.
 
1. Pay small additional amounts on accounts like utilities, rent or your mortgage, school fees or car payments.
 
When we were young and my Mum was a single Mother (extremely rare in the 1960s and 70s), she used to 'save' for our annual vacation by paying a little extra on the rent each week. This was relatively painless for her, and meant that the rent money was then available to fund other things, somewhere down the track.
 
This allowed us to have a three week holiday at the beach every Christmas with no debt incurred. By the time December rolled around, she'd be six or eight weeks ahead in the rent (or later the mortgage) on our suburban home, and she'd be in a position to rent the holiday house, and use her normal fortnightly income, to fund our holiday fun.
 
She was the ultimate 'insourcer', and made do, made from scratch and made hay while the sun shined, stocking up on bargains whenever she could, sewing all of our clothes including school uniforms, and never buying anything that she knew she could make herself.
 
2. Find savings in anticipated purchases.
 
Another thing I learned from Mum, was to spread large purchases over the year, and by that I don't mean interest free, or using the credit card.
 
I'll often use the savings I've made from insourcing to stock my pantry with some little luxuries or purchase school requirements ahead of time. Who says you only buy uniforms and school supplies at the start of the school year? Those things are available all year round, so why not alleviate some of the expense, by spreading the spending over several months?
 
For example, I've made some savings on the food budget in recent weeks due to our new clean eating plan. I could have transferred that money to the account for our cruise in June, but I knew I'd just spend it on something basically useless....as one does on holidays.
 
I decided instead, to invest that unexpected surplus in a new dance uniform for my daughter, as they were selling out an old style at a discount, to make way for a new one. This alleviates an expense later in the year, when I know there will be other demands on our finances.
 
When you have even a small surplus that might otherwise be frittered away on something pointless, aim to make purchases that may not be necessities right now, but still things that would have to be acquired eventually, perhaps when there are other financial pressures. I know I'll appreciate this and other small purchases all the more when school and dance shopping rolls around at the start of the new year, and our list, and our expenses, are a quarter the size of everyone else's.
 
These are cash savings in and of themselves, as good as money in the bank for me, as it means that in  sourcing many items on sale, I can buy what we need, at the best possible best price, and not at a premium when everyone else is trying to buy the same thing.
 
This strategy frees our cash flow up for other purchases at a later date, as it means more money remains in the bank.
 
3. Buy when nobody else is buying.
 
That goes for property and holidays as well.
 
Of course you try to buy property when the market is at it's weakest if you possibly can. I've heard people say in recent times that they'd never invest in property in case the value drops. What nonsense. That might hold true if you're looking to make a quick dollar, but if you plan to live in the property for the foreseeable future, then the vagaries of the property market are of little concern. Property in populated cities, close to amenities, will always improve in value in the long term, and in the meantime, you have a roof over your head. You can't say that about most other 'investments'.
 
Ditto with holidays. When we were really young, and before the beach holidays we enjoyed as teens, Mum would take us on an annual trip on the Sunlander, an overland train that skirted the Queensland coast. We'd travel in Sleeper cabins for 3 days and 2 nights to reach North Queensland and stay in huge houses with enormous beds covered in mosquito nets a la Arabian Nights. We'd go in the May school break, as it was cold then, and most people wanted to go in the Summer. My wise Mum knew that North Queensland was an oven in the Summer and that Winter was the perfect time to go. She also knew it was the least expensive time to go. Thus we got to holiday not once, but several times on Green Island, Magnetic Island and Dunk Island, all of which are destinations now out of reach for the average family, due to the Five Star hotel chains taking the islands over.
 
4. Don't take the  money out of the bank to start with.
 
As I mentioned earlier....'putting money in the bank'? Well I actually don't. I challenge myself to withdraw as little as possible to start with, meaning that the dollars can mount up without ever having to be 'banked'. It works for me.
 
The terminology should be Remainings, not Savings, as for me, it's about how much remains in the bank!
 
5. Pay your bills on time.
 
Remember that bills still need to be paid, and there's no sense in saving money in a special account for a treat, if you have a nasty outstanding bill to pay! I know this sounds obvious, but I constantly hear of folk jetting off here or there, or sending Timmy or Tammy to a prestigious school or some crazy overseas 'educational' trip, when they're a payment or two behind on the mortgage and their credit card is choc-a-block. Or maybe they're a payment or two behind and the credit card is chokkers BECAUSE they're jetting off overseas and sending Timmy and Tammy to a prestige school that they can't really afford. What the heck? Paying the bills isn't as much fun as a holiday, but believe me, the sense of freedom and relief you'll get from getting that nasty vet or mechanics bill out of the way, and then being able to save for something special, guilt free, will be well worth the pain.
 
6. Credit Cards are not money.
 
They're someone elses money.
 
Would you turn to your best friend and say 'hey, spot me $1500 for this lounge, will you?'.
 
No.
 
But you're happy to ask a perfect stranger? As in the bank or finance company that issues you the credit card, that is. Ohhhh....hang on, they ARE your friend? You know that they charge you interest, right? Of course they're your best friend when you sign up. They know they're going to make money out of you!
 
Conversely if your friend said 'Hell yes! Coz I know you won't pay me back on time and by the end of the year, I'll be asking you for $1800, not $1500.'...
 
...you'd look at them like they'd gone mad, and say 'no thanks, I'll skip the lounge'. You'd probably skip the friendship too.
 
7. Don't shop for entertainment.
 
Just don't.
 
Remember....it's Remainings not Savings.
 
8. If you have friends who only want to socialise if it involves spending money, find new friends.
 
 Okay, I know it's not that easy.
 
And for sure, going out for a nice meal is one of lifes great pleasures.
 
If you can afford it.
 
I'm appalled at recent television advertisements offering short term loans for such stupidity as DJ's for a toddlers party, or a meal out with girlfriends.
 
Don't. Ever. Ever. Did I say never?
 
Practice and perfect cooking one meal, then invite your friends over. The money you'd spend on one meal out, will buy some pretty flash crockery and glassware, and anyone can set an impressive table and serve a nice meal. Someone has to buck the trend.
 
Come on. Are you a follower or a leader?
 
9. Learn an heirloom skill.
 
Have you seen how much hand made things cost??
 
Even simple things like a set of three baby muslins stamped with a potato stamp and fabric paint, sell for $60-$80, and can be made for under $15.
 
Anything hand embroidered, you're looking at spending into the hundreds of dollars.
 
The price of chocolate truffles is ridiculous. You do realise that chocolate truffles are just equal parts good dark chocolate and cream, melted together and allowed to cool, then rolled into balls and dipped in cocoa, right?
 
Cupcakes. My gosh. $6.50 for one?? They're still just cupcakes. If you want fancy schmancy icing, do what my friend Annabel over at The Bluebirds are Nesting does, and pop a marshmallow on top of the cupcake, and swirl your icing over it. Top with some metallic sprinkles. Done. Costs about 40c, not $6.50.
 
10. Do not ever allow anyone to make you feel bad about NOT spending.
 
We all have different priorities, and if theirs are at odds with yours, well too bad.
 
You're the one that'll be laughing ten years from now.
 
What painless savings.....sorry remainings....tips can you share?
 
 
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7 comments:

  1. Mimi we are sisters I think. I try not to take the money out as if I do it never goes back in! So I try to get to the end of the month with as few withdrawals as possible and see what I can retain. This sees me go into the new month in a better state than before. It is kind of a challenge and makes me stretch the grocery budget especially.
    In regard to learn an heirloom skill... I went to a fancy baby wear store with Lucy... knitting has never been cooler OR more expensive. Size 000 baby jumpers started at $70, knitted and tiny pram rugs started at $80, cot rugs $200 plus cute hats, toys... I said to Lucy that Nana has already given her $1000 worth of knitting so far apparently! It is beautiful but seriously expensive, you know we are talking so little yarn in such small sizes. And embroidery and others crafts are just the same. I need to sneak back with my camera, I wasnt thinking and didnt take photos (must have been sick lol) xxx

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    1. Lol Annabel...long lost, separated at birth perhaps? I think we both love a good challenge that's for sure! The prices on baby knitwear are insane, aren't they? Teeny tiny things that use less than one ball of yarn, and $70? How fortunate for Lucy that she has a family knitting up a storm for her darling bub. Your embroidery too, Annabel, it's exquisite, and I imagine you'll make many an heirloom blanket for Lucy's family. And how could you not have taken photos?? What were you thinking....lol! Mimi xxx

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  2. The sense of freedom... Oh, how truer these words could never be! Freedom! Liberty! Owing no one! Excellent advice!

    And #6?!? That scenario is ridiculously accurate! Fools borrow.

    Remains, NOT savings. I heard of one husband who stated, "My wife is going to 'save' us to the poor house!"

    I have several ethnic-flair menus that we use and they're delicious, anticipated and inexpensive. Eating out fills the body with junk anyway. We have to eat out on furlough a LOT, and I'm a living witness: It gets SO old.

    Great 'n fabulous are these tips today. What a wise woman you are to share them!

    Hugs,
    Kelley~

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    1. It IS freedom to owe no-one, isn't it Kelley? Such a good feeling! I laughed at the husband and his wife's 'savings'. Is that the one where the more you spend the more you save? I agree, that ethnic dishes on the weekly menu are equally delicious and frugal. Our favourite is a spicy Moroccan flavoured Quinoa, which we'll happily eat sans meat, a couple of times a week. As for eating out....well we love it, but we are mighty picky these days and it's a rare thing that we find somewhere we'd go twice! Thanks for your visit and your wonderful comment. I hope you are on the mend! Mimi xxx

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  3. Hi Mimi,
    So many great ideas for saving here. I love having people over and it is way less expensive that going out...........

    One tip I would say is buy good used cars and drive them a long time..........cause
    the second you drive off the car lot with a new car you have lost a ton of money.
    Typically we try to save up and pay cash for our cars, that way you have more
    dealing power, but a few years ago we lost 2 cars in one year which has never
    happened in our 40 + years of marriage. Thanks to a wonderful car salesman who
    told us they have 7 yr. car loans, which makes your payment lower, so you can
    double it and pay off your car in 31/2 yrs. instead. We took advantage of that and
    if thinks keep going like they are it will be paid off by then, plus we are way ahead
    so if we needed to, for some unforseen circumstance we could skip about 6 months
    of payments. It truly is freedom to not owe anyone, and we were debt free until
    both our cars broke..........but we are thankful for the good cars, and know the Lord
    knew we were gonna need them, even tho we didn't, for when my daughter moved 8 hr. away......so we have a dependable car to go visit her.

    You had a very smart Mom, and I am from a single parent home as well.

    Well, have a good day,
    Blessings, Nellie

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    1. Hello Nellie Dear.That is one heck-ov-a great tip! My hubby and I only last year upgraded our cars, one over 15 years old, and the other ten years old. And the only reason we upgraded the younger of the two was because it was a wheelchair accessible van bought new to transport our youngest son who has Cerebral Palsy, and he is now, very proudly, living independently. It was a gas guzzler, so it made sense to trade it for something more economical. Which we did....a diesel sedan, and three years old NOT new, as you say....they lose value as soon as you drive them out of the sales yard. I agree too, that having a reliable car is key to so many of lifes challenges, so maintenance is important too. The money spent on maintaining your car well, is easily recouped in not having expensive repairs to deal with. You tend to catch things before they're an inconvenience in more ways than one! Thankyou for your comment, lovely lady. Being the product of a single parent family gives all kinds of different perspectives on life, doesn't it? Mimi xxx

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  4. Great advice as always. On point 3 Dunk Island has camping which is very cheap still. ๐Ÿ˜ƒ

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I love hearing from you! I always respond to comments, so don't be shy! Mimi xxx