Looking for ideas on how to save more money? In this video, I share my 8 favourite tips on how to save more of the money you earn. Hopefully it’ll give you the motivation to make the tough (and sometimes awkward) decisions that will turn you into a money saving machine. Money Saving Tips Australia.
In my opinion 90% of saving money is the psychology of it, not which bank account is best or any other minor technical detail (like random apps to use. hint: the apps won’t save you) If you can understand why you buy things and why you spend the way you do, you can start to reverse engineer it and reduce your consumption.
Here are my 8 money saving ideas / tips for 2021:
- Do an audit of your current expenses
Go over your bank account statements, credit card statements line by line and look at anything that you could cancel, anything you could stop buying or buy less of. Be ruthless about this. The goal is to save money and ideally do it quicker than most. - Focus on big wins first, not cutting back coffees
Cutting or reducing a big expense is worth 100x (or more) coffees you skip. Look at your biggest costs throughout the year and ask, can I cancel this cost, reduce it, switch providers, get another quote, reduce the scope of the service. Don’t just auto-renew everything, you could be overpaying by hundreds or thousands per year. - Say no more often
Most people spend more than they earn because they can’t say no to going out with friends, ‘spoiling themselves’, buying things they want but don’t need, spending too much time on social media and being attracted to the products being marketed. Get away from people, platforms and places (ie. clubs, fancy restaurants) that make it easy to spend a lot. Those things are great, but when you’re in savings mode they are places to avoid. - Negotiate / Haggle for everything
Most people just accept that the price is the price. The price is almost never the price. Get into the habit of questioning if that is their best price, if there is any wiggle room on that price, you can save thousands every year from making this a habit. - Automate your savings ASAP
Systems beat willpower any day of the week. Reduce your reliance on willpower (which fluctuates) and - Embrace the frugal lifestyle
Many people don’t save much money because they are half committed to saving money. They want to have their cake and eat it too. If you don’t have much money and want more – start embracing the frugal lifestyle. Sure, it’s not as fun as blowing money all the time, but it will eventually buy you the freedom you’re after. Commit to it and you’ll find it way easier. - Take the emotion out of your purchases, so you buy less
Most discretionary purchases are driven by wanting to get a dopamine hit, wanting to look cool, to look more attractive, to have more confidence, to attract a partner. Be honest with why you’re buying most products, as a marketer I know the deep down reasons people actually buy stuff and it’s often to fill some sort of void. Unless you truly need it, give it a rest for a couple of weeks and see if you still want it. - Buy bulk, use sales, pay upfront or with cash
Simple one but a goodie. Buy bulk for anything you need regularly, leverage sales where you can for products you were always gonna buy and pay with cash (or upfront) where it makes sense. A dollar saved is a dollar earned as they say.
Hope you found that useful and if you have any questions or comments let me know.
Ray
Related topics: 8 Money Saving Tips Australia
Transcription:
G’Day there, Ray Corcoran here. In today’s video we’re going to be talking about eight money saving tips that will help you obviously save money and build your wealth faster. The thing with saving money is obviously for a lot of people, they have money that comes in the door every week or every month or whatever, but the money goes out the door just as fast. If you are somehow who is a, what I call a high consumption person, who is always buying things, always getting stuff, both necessary and unnecessary, you’re just never going to have any money leftover. And if you have no money leftover, you can’t invest. And if you can’t invest, you can’t multiply your wealth.
A lot of this wealth building will start with saving money and reducing costs. That’s what we’re going to be talk about today. I’m going to give you a few tips on how to do that. First thing we need to do is an audit of all your current expenses. This is an easy one to do, but I can’t not mention it. Go through all your bank statements, all your credit card statements, look at where your money is going. If you’re watching a video about saving money right now, then there’s a chance that you’ve got a whole bunch of stuff that you’re paying for that you don’t need to pay for.
So, want to go there, go through it line by line, look at anything you’re spending, both recurring stuff like subscriptions and also once off stuff that people buy. You might see some stuff that you buy once off, but you actually buy once off quite regularly. Like clothes, you might buy some clothes, it might be a once off, but you might buy it month in, month out. You’re always buying new clothes and that sort of stuff. So, have a look at those expenses, be ruthless about what really needs to be in there.
Now, the first thing to understand as well is also that saving money is a scale. It’s kind of a bit of a spectrum from not spending any money and probably having a lower quality of life and less fun, and then you’ve got the other end of the spectrum which is spending heaps of money, probably having a lot of fun, but also not saving that much. And then obviously, hopefully down the track you can move to a point where you have lots of money, you have so much money that you can spend lots and it still doesn’t hurt. But until that point, if you’re building wealth, you need to get good at not spending too much.
Second tip I’ve got is focus on the big wins and not micro savings. Now, micro savings are helpful. Stuff like cutting out coffees or that sort of stuff, it does work. It does work. However, for me personally I find that I don’t want to make my own coffee. I like going out, for me sometimes it’s the only time I get out of the house for a break for work. For me personally, I don’t want to save that kind of money, a couple of dollars. It does add up to a few thousand if you have a lot of coffee over the course of a year, however, for me personally I just don’t want to do that. I’d rather save money elsewhere and what you’ve got to understand is that if you save money on a really, really big purchase, that’s a million times better than saving a couple of little coffees here and there.
You’ve got to take that into consideration, that look at the big expenses that you have. Whether it’s rent, whether it’s mortgage repayments, could you refinance that? Rent, could you live in a cheaper area or same area but better deal? Look at the big expenses that you have. Car repayments, car insurance, any of that sort of stuff, it’s way better for you to spend a little bit of time trying to get a better deal on that, than you trying to save a dollar here, a dollar there. Obviously all of it helps, and if you do all of it then you’ll save the fastest out of anyone, but you’ve got to make your own decision about what kind of quality of life you want to have, and what you’re comfortable with.
The third thing, it’s probably the one that I think most people would struggle with, and that is saying no to things. There’s a few things within this that are really important. One is the environment. So, if you’re around people that spend a lot of money, then the chance of you spending money is going to be a lot higher. If you’re going out with people that are doing things that expensive, they’re going to clubs or they’re going out to certain restaurants or whatever it is, you know it’s going to be expensive, everybody has certain friends that you just know they’re going to spend a lot.
You’ve got to limit your time with those people if you’re in a real heavy savings mode. You’ve got to understand that. Same with looking on social media. A lot of stuff on social media, whether it’s ads for products and that sort of stuff, like I have a marketing agency myself, we’re trying to get your attention so you can buy stuff. If you don’t want to buy stuff, then you should really limit your time on there. And also it won’t give you envy of other people that are buying stuff or showing off their fancy things. They’ve just upgraded to a nice car, or done this and that. Sometimes that can give you a little bit of tension that you want to go get something, as well.
And you need to understand that you just need to get off that I guess social media treadmill. That was a roundabout, not a treadmill, but you’ve got to get off that sort of bandwagon and just sort of unsubscribe from that. Because by getting away from that, your desire will come down for all those stupid products and things you don’t need, or keeping up with the Joneses. You really need to run your own race, lay low, and eventually you’ll be able to flex and buy all the cool stuff. But until that time, if you’re not quite there yet, you need to be saying no to things. Even if friends are asking you to go places and that sort of stuff.
Sometimes it’s going to be less fun to stay home and not do stuff or do something that’s not as expensive or whatever. But the reality is you’ve put yourself, if you don’t have any money and you want to have money, you’ve put yourself in a situation where you need to start making sacrifices, so it’s up to you. You can either have the fun and stay broke, or you can not have the fun, and eventually not be broke, and then you can lots of fun as you go. It’s your call.
Number four is one of my favourite ones. It’s making sure that you haggle and negotiate for everything. Now, it’s maybe not the coffee down the road, but it’s really, really important that you get into a habit where you think about haggling and you’re confident having the conversation about negotiating prices on everything. I’ll probably do a separate video about this at some point. If you would like to see that, let me know in the comments, but it’s really important that you build up your negotiation muscle and your haggle muscle.
The more that you do it, the easier it gets. I actually find it’s quite a fun game to do, and it’s not to give people disrespectful offers for certain things or being ruthless, ruthless. Unless you want to be. But a lot of the time if you just ask the question once, and often one or maybe a second question follow-up will get you a discount. It takes you two seconds, it’s a little bit awkward, but you get hundreds of dollars of savings, thousands of dollars of savings. On every car that I’ve ever bought, I’ve always gotten at least several thousand dollars in saving, and for many cars tens of thousands as they got more expensive.
It’s like to have that practise, the practise that you make on negotiating small things will help you when you negotiate big things, as well. Because a lot of them it’s the same principle, as well. Get used to it. I’ve been to department stores where most people wouldn’t consider haggling. You can do stuff like price matching. Even if you can’t price match, I just ask, I’m like, “Can you guys do any better on that price? Is there any wiggle room on that price?” Asking little things like that, I’ve had people just … I don’t know. Log into the computer and they’re just like, “Oh, you know, we could probably do this if that’s all right.”
And I’m like, “Yep, done.” And I’ve just saved myself $50, $100, whatever. And I treat it like a game. You just never know. I like finding out where the line is, you know? Sometimes there’s big savings to be had. Sometimes they make huge margins on products. Making a discount is not a big deal. They still make their money, they still make some money, and you get a deal. Just being willing to ask the question and ignore any kind of social awkwardness that comes with it. Just ask the question and you’ll be very surprised with the kinds of savings that you get.
Tip number five is automating your savings. This is really, really important. From a psychology perspective, the less that we need to decide things, the better. Most people will manually decide what they want to put into their savings after they’ve been paid. Normally people will just spend, spend, spend, and whatever’s left over goes into their savings. I’m sure you’ve heard of the concept of pay yourself first. That means that you take your savings out when you have some money come in, like a paycheck. Whether it’s from your business or from a job, and you take that money and put it in the savings and you figure out the rest, about how to live off the rest.
That’s the best way to do it. I’ve always done that, and it’s really, really important that you take the decision making out of it. The concept is systems beat willpower. If you have a system that automates it, you don’t have to decide. That will beat willpower any day of the week, because willpower fluctuates. Some days you can be bothered, other days you don’t want to. Having an automated system means that emotion gets taken out of it.
Number six is a bit more of an attitude. It’s all about just embracing and getting over it. Embracing the frugal lifestyle and just getting over it. A lot of people, they’re like, “Oh, do I have to cut this?” Or, “I don’t really want to cut that.” And they’re just going on and on about it. It’s just like I hate hearing about people … Like, they’re struggling to save, but they won’t compromise on anything. If you think about previous generations that have been migrants or whatever, they didn’t have a choice. They had to do it. That’s just what they had to do. I feel like these days we have so many luxuries, like the cars, the kind of cars that we have are nicer, the homes we live in are nicer. We’ve got air conditioning, we’ve got all these little things, creature comforts that we kind of expect, and we’ve got the latest iPhones and all this so stuff.
Which is fine, but if you don’t have any money, you need to reduce your quality of life. And I just think a lot of people put it off, and they try to have their cake and eat it, too. It doesn’t work. It works much slower. It does work eventually, but it’s a lot slower. If you’re the kind of person that really wants to ramp up and make serious money and invest serious money, you just won’t get there. Just accept it, just humble yourself and start living off an oily rag. Get used to it. It’s easier if you embrace it. You’re just like, “You know what? I’m just going to live lean for X time frame. Get my money up a bit and then I can start gradually introducing some lifestyle stuff back in, whilst still investing and saving a lot.” It’s a much, much better way to approach it.
Number seven, when it comes to saving money is taking … It’s crucial. Take the emotion out of purchases. A lot of people buy stuff, like I’ve got a marketing background, the drivers that people buy stuff is often for status, to look like they’re doing well, to attract potentially the opposite sex or the same sex or whatever you’re into. They’re trying to attract a partner. They want to buy … A lot of younger people will buy nice clothes to go out on the weekend and that sort of stuff, and they’re doing it so regularly. A lot of these purchases, if you take the emotion out, you don’t need to buy any of these things.
A lot of it’s in your head. A lot of people are buying confidence when they’re buying certain clothes or cars or whatever it is. It’s really important to understand that you just take the emotion out of it and just look at it brutally honest, “Is this crucial or not?” Let it go. The more expenses that you can dodge and things that you think you need to buy, but if you can get away with not buying it or delaying purchases, or letting yourself, give yourself a couple of weeks to think it over, usually you’ll realise that you don’t actually need it. The more expenses that you can dodge on a weekly basis, on a monthly basis, just means your account’s not taking those big hits for buying a whole bunch of clothes or buying a nice dress or some fancy shoes or whatever it is.
All that stuff, it’s all great, but if you’re in a situation where you want to build your wealth, just cool it on those things temporarily. There’s plenty of time to enjoy those products and you can get those … Those products are always going to be at the shops. Always going to be available online. It’s important that you just … I think Jay Z had some sort of quote where he’s like, “Let your stuff bubble quietly in the background.” Lay low for a bit and then you can do all the fancy stuff later. You can do it year in, year out without it being a big deal. Whereas a lot of these people, they make a bit, spend all of it, and then they just keep recycling. They keep on the same cycle over and over again, which is just absolute insanity to me.
Number eight is a variety of different tips, but it’s just a couple of little simple ones. Just basic stuff. Buying in bulk. If you ever have stuff that you know you buy on a regular basis, just buy the biggest quantities that you can buy of it, depending on how much space you have at your house. Buy the biggest quantities you can of it. Lock in your savings, you can spend … a lot of household sort of products you can buy that’s not perishable. You can buy all that stuff in bulk, in large amounts, whether it’s online, on Amazon, or buying it from some of the big retailers. If you buy enough of it, you get discounts on it.
If it was stuff you were going to buy anyway gradually throughout the year, you might as well just buy big bulk amounts and you can make savings. Same with paying for stuff upfront. A lot of subscriptions, if you pay for a year, you can get 10, 20, 30% off straight off the bat. If you were going to get it anyway, you might as well get the discount. Same thing with timing stuff for sales. A lot of people that if you want to be super frugal, you can be buying winter clothes in summer and summer clothes in winter, when a lot of it’s … If the stores have it available … Pardon me. You can buy those things in off peak periods and save money.
Same with big sales, like Boxing Day, Cyber Monday, Black Friday, end of financial year, all those different deals. A lot of those things that you need to buy stuff for your house or whatever it is, you can buy all that stuff when there’s big discounts. You were going to buy it anyway, but you can get a big saving. A lot of that stuff adds up and all of that stuff you don’t need to buy right this second. You can wait a couple of months until that sale happens and then you can save yourself 50 bucks, 100 bucks, a few hundred bucks and all that does add up over time.
I hope you’ve found those tips super useful. Ultimately I’m not big on … Saving money’s really, really important, but ultimately saving money is … This is good to get started, but ultimately saving money is finite. You can only reduce your expenses and cut your costs to a point and then you can’t cut them anymore. So, we need to work on, go from defence to offence, which is making more money. That’s what I like to spend a lot of my time on, but obviously a lot of people want to know how to cut costs and that sort of stuff, and a lot of these tips will get you to that point.
And then once you’re very, very efficient with your spending, you’re only spending on what you need to buy and you’re saving money, left, right, and centre, you’re negotiating on stuff, you’ll be very, very efficient and then we can shift to increasing your income and then that way your increased income will go much, much further than it would have before. You’ll build wealth a lot faster. Hope you liked that video. If you have any questions, let me know in the comments. Feel free to like, subscribe, all that sort of jazz, and I’ll see you in the next video. Cheers.