3 Ways to Save Money this Week
One of the biggest barriers to saving money is procrastination. In other words, putting it off until another time. Here are three simple ways that you can save money this week and they can make a BIG difference to your financial future if you’re smart about how you use those savings.
1. Take your lunch to work instead of buying it
If you’re spending $10 a day on your lunch without even thinking about it, that’s $50 a week (or well over $2,000 over a year). Spending a few minutes in the morning or the previous night to make your own lunch and take it with you to work is a much cheaper alternative.
Even if you only make your own lunch a couple of times a week, you’ll save money. The smart thing to do would be to save or invest that money. For example, if you could save $20 a week using this strategy and you invested it at a 5% return, you’d save the following amounts.
- Over 1 year: $1,064.
- Over 5 years: $5,894.
- Over 10 years: $13,458.
Notice how you’d save $5,894 in the first five years, but that this amount increases by $7,564 to reach $13,458 over the next five years. That’s due to the power compounding returns. Put simply, this means that your savings grow at an increasing rate over time.
An alternative to investing your savings would be to use them to increase your repayments on any debts you have, so you can pay them off faster. Let’s look at an example:
According to the Australian Bureau of Statistics, the average home loan in Australia for first home buyers
is $384,700. This would take you 25 years to pay off if you repaid $519 per week, assuming an average interest rate over the life of the loan of 5%. You would pay a total of $289,434 in interest over the 25 years.
However, if you increased your repayments by $20 per week by using the money you save from not buying your lunch every day, you’d pay off your home loan 21 months sooner and you’d save yourself $23,433 in interest!
2. Cut down on the number of coffees you buy
Most of us love having a coffee, but it can be an expensive habit. If you’re spending $5 a day (or more) on buying coffee, try cutting back so you can save money. For example, buy one every second day instead of every day. You could make your own coffee every second day instead of buying one. If you do, you’ll save more than $10 each week, or more than $500 a year. It all adds up.
3. Shop smarter and cut down your grocery bill
According to the latest figures from the Australian Bureau of Statistics, the average Australian household spends $254 per week on groceries. Even if you can only cut that figure down by 10%, that’s a saving of just over $25 per week (or $1,320 over the course of a year) that you can put to better use.
There are some simple strategies you can use to reduce your weekly grocery bill, including:
- taking a shopping list with you to the supermarket that only contains the things you need (and sticking to it). Avoid buying impulse items that are on display if they aren’t on your list. You don’t need them.
- buying products on your list that are on special.
- buying cheaper brands.
- buying certain types of foods on your list in bulk to take advantage of cheaper prices. For example, foods that you can freeze and eat later.
- avoiding taking children with you when you shop, so you don’t fall victim to ‘pester power’ and buy things that you don’t need.
- checking the ‘use by’ dates on items you buy so you won’t have to waste money by throwing out expired food.
How we can help
At Qi Wealth, our experienced, expert team of financial advisers can help you put strategies in place to help you save money to invest or to reduce your debt. We’ll take the time to understand your individual circumstances so that we can provide you with the best possible advice. We develop long-term, trusted relationships with our clients.
Contact us today to find out how we can help you!