Do you have savings?

Do you have savings?

With the cost of living increasing weekly it is hard to live comfortably and save. Most of us run out of money the closer it is to pay day, but it is not a good idea to live pay cheque to pay cheque.

If you set a goal you will find it is easier to save, you may find that you can save for a holiday, but then not be able to save for a rainy day. It is important to save for big ticket items, furniture, holidays, cars and houses, but it is also important to have savings, not just for a rainy day of shopping but for when the unexpected occurs.

Unexpected costs can include car costs such as servicing, insurance or a tow truck. What if, instead of having to use your credit card, you could use your rainy day money for unexpected car costs?

Are you unable to attribute where large sums of your pay went? It is hard to account for every single dollar you spend, especially on a Saturday night out, think about the costs involved; taxi, food, alcohol, cigarettes, cover charges, new outfits and other costs that are involved in a single night out. Costs such as these are often unaccounted for in a budget and leave you scratching your head thinking 'where did that extra $300 go?'

To help you save, set up a budget and a second account. Split your pay into spending and saving on every pay day. Determine how much you need to spend a week or a month and put that into spending and then save the rest. If you don't see the money in your spending account you are less likely to spend it.

If you find that you spend a lot of your money on useless items and unhealthy food, don't keep as much cash in your wallet. Most people find that if they have cash in their wallet they are more likely to spend it. So, if you find you also have this problem, only keep cash in your wallet for emergencies and parking meters. Chances are when you are swiping your card you are thinking about what you're buying and you are less likely to impulse buy.

If you have trouble collating your spending, take a week to write down where you spend your money. Hide a little notebook in your bag and write down every time you pay for something, this will help you determine how much money you need and where you are wasting money.

Debt is where most of us seem to get ourselves in trouble. In our modern society it's extremely easy to apply for a loan and be granted the money, whether it is for a car, travel, house or personal expenses. It is important that if you have any type of debt, including credit card debt you pay it off as fast as possible. Pay more than the recommended monthly amount, if you can, so you pay less in interest and have the debt paid off faster. Paying off your debt, is just like saving, because in the long run you are saving yourself from extra interest.

It takes just over a month to create a habit, so if you do the same thing, in this case, budgeting and saving for two months it will become a habit that is hard to break. Saving on a regular basis is a great habit, even if you can only put away $50 a month, in a year you will have $600 in savings.

Even if you are young, it is a great idea to save, especially when you work part-time. If you are still living at home, that is the best time to save, you have less out going expenses and you can save your cash for when you do. If you save now, you'll have a great, dependable car to drive.

It is hard when you are not saving towards something in particular, but chances are you see yourself having your own car or home or even travelling in the future, so tell yourself you are saving for one of those things, this will hopefully encourage you to contribute more to your savings account.

$50 a month seems like a lot to begin with, but realistically that is only $12.50 a week. A daily coffee will cost you at least $3, cut out buying your coffee four days a week and there is your $12.50 savings. Or, choose to eat in more than eating out, not only will you save money, you'll have left over's for work meaning you won't have to pay $10 for lunch.

If you know you are an impulse buyer or love shopping stay clear of the shops and when you do go, take a list of the items you need to buy. Remember, it isn't important to always have the latest gadgets or technology, wouldn't you rather drive a nice car or have a roof over your head? When you hit the shops, leave your credit card at home, if you don't have it, you can't use it!

It can be hard to learn not to waste money, but think about only buying the essentials, it is important to live a little, but ask yourself before you buy that new dress, that looks like every other designer dress in your wardrobe, do I actually need this? If you do need new clothes head to clothing factory outlets, you can pick up samples and individual items cheaper than stores, chances are you'll be the only one in the dress too!

Set yourself a goal and then decide what you will do to reach that savings amount. You could:
Give up buying your lunch, every day.
Stop shopping for shoes, you have enough pairs.
Cook dinner, instead of eating out all the time.
Give up excessive pampering, limit yourself.
Stop buying the morning coffee.
Buy less alcoholic drinks when going out.
Buy fewer magazines, read free magazines online!
Stop buying all the new gadgets that hit the stores.

If you calculate the savings, you will be amazed. Just giving up buying a magazine once a week and reading free online magazines such as Femail.com.au and Girl.com.au you will save approximately $312 a year, or if you choose to bring your lunch to work twice a week you'll save on average $1,000 a year.

Everyone understand saving isn't easy with rate rises, food increases and increased living costs but by cutting costs you will be able to survive and still save for the future, even if you have a low income.

Brooke Hunter