How to start a savings plan
Follow a simple game plan to kickstart your savings goals
Sometimes it feels impossible to get ahead of the game. You’re paying your rent on time, you haven’t missed paying the power bill for at least three months now, and your fridge has more vegetables than beer in it – adulting is well under way.
But, let’s be honest. You’re still living payday to payday. Mum can’t understand why you aren’t saving anything, and frankly, you’re not sure either. You have that one friend who seems to have a handle on their money, and you’d like to be more in control of yours. Where do you begin?
Do a 360
The first thing to do is take a good hard look at ALL of your current spending.
How familiar does this scenario sound?
You grabbed a large flat white on the way to work, and will possibly top up with another coffee later in the day. Plus, of course, you picked up a sandwich for lunch because although your fridge is full of vegetables, you’re not sure what to do with them all.
Then, Jonesy wants to have a quick beer after work. Which leads on to several more beers at the craft brew bar, and a taco or two from that great new food truck just around the corner. Then, an Uber home because that’s the right thing to do, of course.
If that’s close to a standard Friday for you, that could be up to $100 in incidental spending. And, if that’s almost every Friday, that’s close to $5,000 a year on coffee, beer and tacos!
Of course, you don’t have to become a Nigel-no-mates to start a savings plan. Work out where you can make some cut backs, reduce some costs (buy only one coffee a day, learn what to do with all those vegetables) and commit to only going out every second or third week. Making some small changes to your lifestyle will free up some cash to put towards savings.
Consolidate your debt
You’ve only got another 18 months on your car loan, so that’s your only debt, right? Well, except for that AfterPay on the TV. Oh, and the credit line on the new couch and fridge because your flatmate moved out and took all the furniture. And that credit card that was meant only for emergencies, but the balance seems to be growing each month.
Find the best deal you can to move all these debts into one manageable amount. Although it might seem like a larger mountain of debt at first, by consolidating all your payments into one, you’ll be able to chip away at it faster.
Don’t spend like your friends
Lastly, remember this: Most people live outside their means and rarely discuss it. And as typical Kiwis, we don’t tend to talk about money with others. So, it can feel a bit like you’re on your own when you’re trying to get a handle on your money
Make a start by reviewing all your spending, consolidate any debts and make some small changes to how you spend your money. And stop spending like your mates.
By starting to live within your means, you’ll feel more in control and you can kick back and relax while jumpstarting your savings plan.