Saving money doesn’t have to be all about making sacrifices. Of course you could spend the night in, eating baked beans on toast, while watching a borrowed DVD that skips, because you’ve given up eating out, meat and cable to save costs.
These are totally legitimate ways to save. And sometimes, the best evening is spent vegging out at home. Except when DVDs skip. I hate that!
Trouble is, as soon as the whiff of ‘cutting back on expenses’ is in the air, our brains go into rebellion mode. Staying at home is suddenly boring instead of cosy, we dream of smashed avocado on sourdough and we crave the latest blockbuster instead of our favourite movie we’ve seen 20 times.
But it is possible save money without giving anything up.
These strategies take work and I don’t promise implementing them will be fun. Well it might be if you love reading insurance policy product disclosure statements like I do. Kidding, I’d rather spoon out my own eyeball.
But I promise, the sense of self satisfaction from putting in the effort and saving money without giving anything up is well worth it.
Negotiate Your Fixed Costs and Save $500 Just Like That
Think “fixed costs” are really fixed? You might be paying the lazy tax. Anything from insurance premiums to internet plans are all negotiable.
Companies spend an awful lot of money trying to attract new customers with bonuses and special rates. Existing customers are rewarded for their loyalty with premiums that just go up every year.
So if you pay the premium shown on your annual statement, you’re probably paying too much. It’s worth getting a few quotes to compare and if you really love your current service provider give them a call and tell them you’re going to switch unless they start to value your loyalty.
We save almost $500 per year just by shopping around for our car and house insurance.
Get Your Bank To Show Their Appreciation For Your Business
Banks are quite similar to insurance companies in that once you’re a customer, they know what a pain in the behind it is to leave. This means banks generally do what they want and most of us don’t have the time/energy/care factor to do much more than occasionally muster up a complaint to our friends.
Still, local bank managers are pretty friendly people and I’m pretty sure they actually like it when their customers come in for a chat about money. I mean I love talking about money so it makes sense that a bank manager would.
A simple appointment to discuss your banking situation can yield thousands in savings. When we visited our branch, not only were our bank fees waived saving $180 a year, our home loan interest rate was reduced by 0.5% saving us around $1,000 per year.
By the by, in Australia the trend of charging fees to manage your money is largely behind us, so it’s pretty easy to find one without account keeping fees.
Other charges on the other hand are pretty ludicrous. But if you’ve been charged a late fee or the like and it’s the first time, call the bank and ask them to waive it. They usually will.
Use Your Allegiances to Your Advantage and Save On Stuff You Want
Being part of a team really is the best, financially as well as socially speaking. There are tons of special deals and offers on the table available workplaces, unions and other membership organisations.
Trouble is most of us don’t know what offers are out there. After 13 years with the same employer and private health insurance company, my husband found out we were eligible for a 10% discount on our premiums because of a deal his employer had done. One phone call saved us $300 annually – not bad for 20 minutes of hold music.
Since wizening up to the membership perks on offer, I’ve since found 10% discounts on stuff I actually wanted through our health insurance company, my Mom’s RACQ membership (because I can be added to her account and get the discounted offers, but not the roadside assist), the Union and Queensland Theatre Company.
The best part is you don’t even need to listen to hold music; the information is online.
Review Your Memberships and Optimise Your Life To Suit You While Saving
Ever heard the one about the New Year’s Resolution and the gym membership? Look, it’s fine. If you sign up to my $297 course I’ll show you the exact steps you need to take to change habits effortlessly. Ha! I’d be a squillionaire (though I’d settle for billionaire) if I could do that, because in reality, habit change is really, really hard.
So, you don’t hit the gym as often as you thought you would. Or use that bread machine that sold you on the promise of waking up to smell of fresh bread every morning. Seeing as this is a personal finance blog, not a fitness or cooking blog, I’m not going to try to motivate you to go to the gym or bake more often.
I’ve been there, wistfully looking at the thing I thought I’d love or that once upon a time I did love and promised myself I would use it again. Then the thing became a burden and the guilt increased by at least 4x, especially if I’d invested more money into it.
Be kind to yourself. Review all your memberships – the gym, movie club, yoga classes, Netflix, even extras health insurance – and ask yourself, are you getting value for money? Is there a cheaper way of doing this?
If you’ve been super committed to an exercise class lately, can you buy a pass with more entries that works out cheaper per class? If you only go to the gym once a week, would a pay per entry pass be better value? I bought a 3 month gym pass but only used it once a week, then a few years later figured a 10 entry pass would be a better way to go. I finally came to the conclusion that the gym isn’t for me.
Do you use as much data on your internet plan as you thought you would? Ok, maybe that’s a stupid question!
Point is, you can always optimise your spending as your life changes. You try stuff, you like it for a while then realise you’ve drifted away from it. That happens to everyone. It’s part of life. Just make sure your past isn’t costing you today.
Find Your Goldilocks Point and Save Like Crazy
Do you know which bottle of wine on the restaurant wine list is the best value for money? Often the cheapest one. Do you know which takeway coffee size is? Well, that depends if you want more milk or more coffee. Personally I hate the latte advice, but I do love value for money.
The funny thing is marketers love value for money too, not yours though, it’s the company they’re paid by. Research has shown that most of us like to take the middle ground, believing this is optimal.
So in terms of coffee, it’s the medium size and it doesn’t even matter what the volume is as long as there is a bigger size, which we perceive as too big and a smaller size, which we perceive as too small. It’s called the context effect.
Wine lists are designed the same. There’s a very expensive option which hardly anyone chooses and a cheap one which almost no one chooses. With the high and low price points defined, we feel the middle ones are about right even though that’s where the biggest mark ups are.
In both of these examples, it’s actually the cheapest ones that are the best value for money for the customers while the middle ones are best for the business.
With this in mind, I always choose the smallest / cheapest option. I still get the coffee, wine or meal that I want, but I get the best value all the while saving the difference.
If you buy a $4 coffee each day, by downsizing to the smaller size could save you $120 a year. Throw in a cheaper bottle of wine every couple of weeks and that’s another $130 a year.
And if you got really serious about downsizing, the sky is the limit in terms of savings. For example, downsize your car, house or even neighbourhood and you’re talking thousands of dollars in savings. And the best thing is, you still have a set of wheels and a roof over your head, while being on the way to financial freedom.
Have I missed any ways to save without giving anything up? Have you successfully negotiated some great deals? How far would you be prepared to downsize to save money? Do you still watch DVDs?