How to Manage Your Money by Setting Financial Goals

Setting financial goals is a great way to ensure you’re always in control of your personal finances. Whether you’re looking to save towards a particular purchase or simply want to manage your finance so you spend less, using financial goals as a motivational tool can help you achieve your aims and even make you happier.

What are Financial Goals?

A financial goal is simply a target you set yourself within your own personal financial circumstances.
Some examples of financial goals might be:

• To spend less on your weekly household shopping.
• To save towards making a large purchase, such as a deposit for a home or a holiday.
• To put more money in your child’s bank account or trust fund.

These goals are quite general, but you can tailor them to meet your own individual circumstances. Specific financial goals based on the above might be:

• Reduce my weekly shopping bill from $150 to $120.
• Save $200 a month to pay for a holiday next summer.
• Commit $30 per month extra to my child’s bank account.

The numbers will change depending on how much disposable income you have and the balance of your spending at present, but these suggestions should give you some idea of how you might want to lay out your financial goals.
You can also look to intertwine your financial goals. For example, in the points above we may use the $30 saving from the weekly shopping bill as part of the holiday savings fund, or use the saving from the first week of the month to pay the additional sum into the child’s bank account.

Why are Financial Goals Important?

As the saying goes, ‘tomorrow never comes,’ and when it comes to financial goals the same is often true.
If you have financial goals then you’ll immediately have a focus and put your mind to achieving your aims.
Knowing why you’re saving money is also a key factor in helping you to achieve your goals. If you’re putting money aside but for no specific reason, you’re more likely to dip into it, as you’ll have less to worry about when spending it. That said, there’s nothing to say you can’t use ‘saving for a rainy day’ as a goal, so long as you’re confident you’ll have the discipline to keep saving!

“If you have financial goals then you’ll immediately have a focus and put your mind to achieving your aims.”

Setting Your Financial Goals

To set your financial goals you should make sure they’re all:

• Specific – Like our second example earlier, look to ensure the goal is as specific as possible. ‘Save $30’ is a much stronger motivator than ‘save something.’
• Realistic – if saving $200 a month is going to be difficult, save a lower amount. Remember you can always adapt your goal later.
• Flexible – As we’ve just mentioned, you need to set yourself goals but you should also leave yourself some room for change as your financial circumstances dictate.
• Time Based – Alongside having a specific goal, this will work as a great motivating factor and can even be used to dictate the goal you want. For example, ‘I want to save $1,500 in the next 12 months. I will do this by saving $30 a week on my shopping bill.’

Another thing you should do is break your goals down into short term, medium term, and long-term goals.
Again, your personal circumstances may dictate that some goals need to be short term rather than long term, which may in turn influence how you set your own goals.
Below are some examples of the types of goals that might fall into each category.

• Short-term financial goals – What do you want to achieve in the next six to 12 months? This could be linked to saving a certain amount for a holiday or towards the festive season, or if you have a personal loan or credit cards, you might want to increase the amount you’re paying towards these.
• Medium-term financial goals – These goals might be ones that you will look to achieve in the next three to five years. Goals might be saving enough money to have a deposit for a home, buying a new car or paying off a hire purchase agreement, paying off a loan you recently took out, or saving a certain amount to a pension or your own retirement savings.
• Long-term financial goals – What are your wider aims in life? You might want to build on your medium-term goal of saving towards retirement and have a long-term savings plan, perhaps even with a retirement date in mind. Other long-term goals might be to save enough to pay for your child’s further education, or towards a big, once in a lifetime holiday.

“Committing to and achieving your financial goals can help you live the life you want in the long-term, and the feeling of satisfaction you will enjoy when sitting on the beach or travelling around the world will be immense.”

Working Towards Your Financial Goals

While you might already have some ideas in your head of what you want to achieve within each category, ensure that you focus on your short-term goals first. This will ensure you don’t find yourself trying to achieve too many financial goals at once, which will likely lead to you failing to achieve any of them as you find you have too little money to commit to all of them.

What Will You Gain?

While financial goal setting and management can seem boring on the surface, once you engage yourself and think about what you can achieve, it’ll soon become apparent that it’s worth it.
Committing to and achieving your financial goals can help you live the life you want in the long-term, and the feeling of satisfaction you will enjoy when sitting on the beach or travelling around the world will be immense.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

How to Finance your Dream Wedding

Weddings are a big event, and for most people they represent the biggest and most important day in their lives up to that point. When planning a wedding, it is common for people to have grand ideas and dreams of what they want their big day to look like. It is also true that weddings come at a cost, and it isn’t usually a cheap one.
What are the different elements that go into a wedding that you’ll need to consider how to pay for?

• Cost of the ceremony itself
• The venue and transport to and from the venue
• Dresses for the bride and bridesmaids
• Suits for the groom and the best man
• The reception, and food and drink for all guests

That isn’t everything, but represents where the main expenditure will come from, while at this point you haven’t even considered the honeymoon, which can see the cost of a wedding double on the spot.
What options do you have available for financing your dream wedding?

Family Contributions

Parents of both the bride and of the groom may wish to contribute to the cost of the wedding. While traditionally, the father of the bride would make the biggest contribution and sometimes even pay for the whole thing, today it is commonplace for both sets of parents to help.
The one obstacle you do have here is that if it isn’t a conversation you’ve ever had in your family, even when you announced you were planning to marry, it might be a difficult one to bring up. If you’re uncomfortable doing so then you can go ahead and explore your other options, and you might even find that your parents mention it to you during your wedding planning, particularly if they take a close interest and are involved in helping you through the process.

Using Your Savings

Depending on how much money you and your partner have been able to save down the years, whether when together or when you were both single prior to meeting, your savings may easily be able to cover the cost of your dream wedding. If you choose to use your savings, you might need to compromise on various aspects of the wedding depending on how much money you have at your disposal.
If you would rather have a dream honeymoon over a dream wedding – or class the honeymoon as part of the wedding overall – then you may wish to use your savings on the trip of a lifetime and have a smaller wedding instead.
Before using your savings to pay for your wedding you should also consider whether you might want to use your savings for another purpose, such as buying a house if you have not already done so.

“If you choose to use your savings, you might need to compromise on various aspects of the wedding depending on how much money you have at your disposal.”

Take Out a Personal Loan

Constancy Wealth Management can find you personal loans to help couples enjoy their dream wedding, and if you’re able to repay a loan but don’t have the capital to finance a dream wedding upfront, it is certainly an option worth considering. You might choose to take out a personal loan to pay for the whole wedding and your honeymoon, or you may take out a loan to supplement any savings you and your partner have between you.

“You might choose to take out a personal loan to pay for the whole wedding and your honeymoon, or you may take out a loan to supplement any savings you and your partner have between you.”

If you choose to take out a personal loan using Constancy Wealth Management  to help pay for your wedding, either you or your partner will need to apply individually, as most lenders do not currently accept joint applications. If you are unsure whether you would be accepted for a loan, take the time to check your credit score prior to applying.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

How to Pay Off Your Personal Loan Quicker

When taking out a personal loan, you will do so ensuring that the repayment amounts you have committed to are affordable. We understand that your personal circumstances may change from time to time, and we would be sympathetic towards any customer that needed to revise their payment amount should they lose their job or face another scenario that would see them short on money for a period.

Likewise, personal financial circumstances can also change for the better, which may see a customer decide they wish to pay off more of their loan at once or make a larger payment as a one-off. This would help to pay off a personal loan quicker, while there may be other possibilities for doing so. At Constancy Wealth Management, our aim is to ensure that all our customers benefit from our simply personal service, and an important part of that is helping you to understand all your options for paying off your personal loan quicker.

What are the opportunities available to you?

Opting for Higher Repayment Amounts

By choosing to repay your personal loan over a shorter period, you will pay a higher amount each week or fortnight, yet save money over the course of the loan owing to the lower level of interest you will pay. Individuals will often choose a repayment amount that leaves them other disposable income, which is understandable. However, we would encourage you to look at your budgeting and try to choose as high a repayment amount as is manageable for you.
Don’t ditch your lifestyle completely and wipe out your disposable income, but do consider the options you will make by taking this route. You can call us to speak to one of our personal loan experts if you’re unsure.

“At now Constancy Wealth Management our aim is to ensure that all our clients benefit from our simply personal service, and an important part of that is helping you to understand all your options for paying off your personal loan quicker.”

Make a One off Payment

If you chose a longer loan term and lower repayment amount to err on the side of caution, you may find you have money left over at the end of the month. In this instance, you may wish to use this sum to make an additional payment towards your loan balance. Should you believe this is likely to be a scenario that will present itself during your loan term, you should check the terms and conditions regarding additional payments, as you may need to pay a fee.
Sometimes making one off payments will not actually save you any money, as the full amount of interest may still be applied and where fees are involved you may even end up spending more, though you will achieve paying off your loan quicker.

Consolidating Your Loan

If you have more than one personal loan, or you have a range of other debts that you are currently paying off, then a debt consolidation loan may be a suitable solution for you. While you will still be in debt, a consolidation loan will enable you to pay off an outstanding personal loan and may also mean you reduce your interest and repayment amounts.
Should you take the option of consolidation as a means of paying off an existing personal loan, you should consider the higher regular repayment or one off payment options when planning your debt consolidation loan period and regular repayment amount.

“If you have more than one personal loan, or you have a range of other debts that you are currently paying off, then a debt consolidation loan may be a suitable solution for you.”

Only Borrow What You Need

At Constancy Wealth Management, we’ll speak to you about the reason for your loan to ensure you only borrow what you need for that specific purpose. While borrowing more than you need ‘just in case’ might seem a good idea, ultimately it means you accrue more debt and therefore pay more interest than you really need to.

Paying Off Your Personal Loan Quicker

There are many factors to consider when planning to take out a personal loan. We recommend you look at all the options carefully to ensure you don’t spend more than you need to on interest, or take longer to pay off your loan than you perhaps need to.
You will always have options available for paying off your personal loan quicker, and can contact us at any time during your loan period, or before taking out a personal loan, to enquire about the options available to you.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

Setting Financial Goals that Work for You

You might not feel you are at a point in your life where you need to be setting financial goals or even worrying about your finances at all. However, planning for a secure financial future is something we all should be doing, and by setting financial goals we can retain control over most of our financial circumstances. Setting financial goals can also help if you have a sudden and unexpected expense, such as a medical bill, as you will be able to pay without necessarily needing to turn to a personal loan or another financial solution.

At the same time, many appreciate the value of setting financial goals, and actively look to save money on a monthly basis.

Setting Financial Goals that Work For You

The most important thing to consider when setting financial goals is that they are realistic relative to your personal circumstances. ‘Save $300 a month’ is an exciting sounding goal, but not everyone is going to be able to do it. By ensuring your personal financial goals sit firmly within what you are able to achieve, you will be more motivated to achieve them. That’s not to say you should set yourself what might be an easy goal of saving $10 a month so you can tell yourself at least you’re saving something! Look to find the perfect balance of something challenging yet motivating at the same time.

‘The most important thing to consider when setting financial goals is that they are realistic relative to your personal circumstances. By ensuring your personal financial goals sit firmly within what you are able to achieve, you will be more motivated to achieve them.”

Deciding Why You’re Saving

As noted earlier, one of the main reasons people don’t save or aren’t motivated to start saving is that they don’t feel they need or have reason to. If you don’t have a specific need or reason to save you can still do so, and call it your ‘rainy day’ or ‘emergency’ fund for when those unexpected life events and expenses do come out of the blue.
So far, we have spoken in terms of saving, but another financial goal you might wish to pursue is to rebalance how you spend your money. Instead of saying you’re going to save $12.99 a month by not using Netflix, you could say you’re going to use the $12.99 a month towards joining a sports club, for example. If you’re setting financial goals with your partner, you might look to save enough to be able to eat out together once a month.
Once you have an idea of realistic financial goals in relation to your circumstances, and whether these predominantly involve saving or rebalancing how and where you spend your money, you can start creating the personal financial goals that work for you.

Getting Specific and Challenging Yourself

Whether you’re rebalancing your spending or savings, it’s going to pay to be specific. By giving yourself vague financial goals such as ‘save some money,’ you’ll either end up like the $10 a month example above or not doing anything and saying that you will start tomorrow.
Using the examples we’ve already looked at and using some others, here are some financial goals you might want to consider:

• I will save $300 a month for my savings account.
• We will cancel our Netflix and Spotify subscriptions and use the saving to eat out once a month.
• I will spend $20 less a week on groceries, saving $80 a month for my savings account.
• I will buy a flask and take my own coffee to work, by not buying a coffee I will be saving $4 every morning.

The beauty of financial goals such as these is that they are simple, and it is easy to understand the impact even relatively small savings can have in the long term, and how you can use one financial goal to help you achieve another. By saving $20 a week on groceries and the same on a morning coffee, $160 of the $300 a month saving goal above has already been met.
How much and how easily could you save by making similar small changes?
You can also look at making bigger changes if you’re looking to save a significant figure. Might you have an opportunity to earn more money in another job, for example, which will then leave you more disposable income to either meet your financial goals easier or set yourself goals that are more challenging?

“Once you have set your financial goals the best way to be motivated is to think about them as short, medium, and long-term goals.”

Motivation

Once you have set your financial goals the best way to be motivated is to think about them as short, medium, and long-term goals. This can help you to focus your mind, and is particularly powerful if you are saving towards a big landmark purchase in your life.
Below are some brief examples of what might be considered as short, medium, or long-term goals. As with financial goals in general, where these fit for you will be specific to your own circumstances. Remember, the idea here is for these goals to work for you!

Short Term Goals

Think financial goals that you might like to achieve in the next 12 months. A short-term goal might be to save money in order to pay off a credit card or personal loan quicker, or to save towards a weekend break during the year.

Medium Term Goals

We’re now thinking three to five years in the future. If you’ve just taken out a personal loan, one of your goals may be to ensure you make the regular repayments on time and pay the loan off as soon as you can. If you currently don’t have any outstanding debt, you might want to save towards a deposit for a house or buying a car. Depending on your personal circumstances you might even choose to save towards a once in a lifetime holiday.

Long Term Goals

A big holiday might also be a long-term goal, but you could perhaps be starting to think about paying off your mortgage or your retirement, too.

Making Your Financial Goals Work for you

While there are several options available to you when it comes to setting financial goals, you should take time to consider the goals that will work for you and that are realistic and achievable. By setting specific goals that suit your circumstances, you will find yourself motivated and determined to reach them, and feel excited about the possibilities your financial goals can provide.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

7 Tips for Successfully Organising Your Finances

Having well-organized finances is beneficial for a number of reasons. Not only does being organised mean you can enjoy financial independence and have no need to take on any type of debt unnecessarily, it gives you peace of mind and ensures you can have positive thoughts and feelings about money, and use your organized state to save and plan for a bright and exciting future.

One of the great things about financial planning is that you can be organized, successful, and maximise your money whatever you earn, leaving you to enjoy life and focus on the things you enjoy. Here are seven tips for successfully organizing your finances.

Create a Budget

Creating a budget is always the first step for successfully organizing your finances. It may sound daunting now, but it’s easy to do and can make a big difference to how you view your money right away.
You can read our blog on creating and managing a budget for more tips, but the key things you need to do include:

• Calculating your income and expenditure.
• Separating your expenditure into fixed and variable expenses.
• Monitoring your spending so you can tweak your budget to suit your financial goals
• Breaking down your finances into what you need to spend, what you want to spend, and what you want to save.

Once your budget is in place and you’re committed to it, you’ll instantly enjoy a greater degree of control over your finances.

“Creating a budget is always the first step for successfully organizing your finances. It may sound daunting now, but it’s easy to do and can make a big difference to how you view your money right away.”

Make Savings Non-Negotiable

Many people who don’t have savings will use the excuse that they don’t have the money to do so, yet will actually be spending their disposable income on things they don’t really need. If you’re serious about organizing your finances, making savings a fixed, non-negotiable expense similar to your mortgage or other regular bills is worth doing. This ensures you’re always saving and putting money away – even if you don’t have a specific savings goal – and means you’re covered for unexpected expenses or life events, such as needing to undertake emergency home repairs or being made redundant.

Having the equivalent of six months’ income saved is often cited as a good starting point, and means you’re well covered for whatever life throws at you from a financial perspective. If you don’t need the money for emergencies, you’ll at least have a good safety net if you want to leave your job to start a business or take an extended break.

Pay All Your Bills on Time

One of the easiest ways to lose money is to not pay a bill that is subject to a late payment charge if you’re as much as a day late with it. Considering how easy it is to set up direct debits today, there is no reason for this to happen to you. When setting up your direct debit you can ensure you choose a day that suits you and include this within your budget planning to never miss a payment or incur a late payment fee again.

Plan to Avoid Bank Charges

Another often self-inflicted financial problem is not having enough money in the bank to cover a direct debit payment, which gives the double problem of a bank charge as well as a potential late payment fee. An additional bank charge many people simply accept and consider a part of life is interest and other charges related to an overdraft. While an overdraft is a useful and sometimes needed safety net, you should ensure it remains just that at all times.
If you find yourself using your overdraft as essentially a credit facility, look to use the savings you achieve through budgeting to ensure you’re living with your bank balance as zero as much as possible rather than using the additional facility from the bank.

Maintain a Great Credit File

If you pay all your bills on time and do your best to avoid bank charges, then you’re probably already doing a great job of maintaining a great credit file and score. While having a clean file won’t help you save money on a day-to-day basis, it does mean you will be offered better interest rates should you apply for a personal loan or another form of credit such as a mortgage.

You are entitled to free access to your credit report and score and should spend some time ensuring the information held on your credit report is correct.

“While having a clean file won’t help you save money on a day-to-day basis, it does mean you will be offered better interest rates should you apply for a personal loan or another form of credit such as a mortgage.”

Take Advantage of Technology

In the blog post highlighted earlier regarding creating and managing a budget, we speak about using financial apps and Excel templates to make it easy to visualise your financial reality. Another way you can take advantage of technology is to use online banking services and online account management for credit cards and any other personal finance or credit products you use. This means everything will be kept in one place, and if you ‘go paperless’ you save yourself the stress of managing statements and keeping them stored safely at home.

Prioritise Debt Repayments

Prioritising debt repayments can be difficult, particularly if you find yourself trapped in the debt cycle where you’re paying a credit card bill then relying on the same credit card for subsistence, thus building up the bill again. When planning your budget be sure to factor in debt payments and look to use any money savings to pay these off quicker.
Focusing on clearing your debts will:

• Make you feel better
• Give you a feeling of control back over your finances
• Help prevent damage to your credit score beyond any already incurred
• Reward you with a large chunk of your income when you have paid them off in full and now have the disposable finances to use as you please

Organizing Your Finances

By being organized with your finances, you can break out of the debt cycle, ensure you don’t live a pay cheque to pay check existence, and have the confidence to live the life you want. Remember to take a proactive approach to dealing with your finances, and set budgets and goals relative to your personal circumstances and to what you want to achieve.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

3 Ways to Finance a Home Renovation

A home renovation might be required in order to make necessary ‘running repairs’ to your home, or you might be looking at making changes to enhance your lifestyle or add value to your property with a view to selling it at a later date. Whatever the reason, undertaking a home renovation is a big piece of work, and usually a costly one. On top of that, home renovations are exciting and stressful all at the same time.

By planning your renovation effectively, whether you’re looking at a big job such as building an extension or a smaller project with a few internal works, you will save yourself a lot of time, money, and stress in both the short and the long-term. While the cost of your home renovation will depend on the work you’re looking to have done, you have a number of options available when it comes to financing your home renovation.

Personal Savings

Depending on your personal financial goals, you might have been saving for some time; perhaps even with the specific goal of paying for a home renovation with the money you have saved. Alternatively, you might have simply been saving to ensure financial stability, and be considering using this capital now you’ve decided you need to look at home renovation.
Using your personal savings to pay for a home renovation can be convenient and satisfying in a number of ways, including:

• You feel you’ve earned a reward for all your years of saving
• You have the finance to complete whatever work you want
• You may be able to cover the cost yourself without relying on other sources of finance

At the same time, depending on the home renovations you’re looking to complete, you may wish or be able to combine your savings with another option to ensure you can fully finance the necessary work.

Re-mortgaging Your Home

Releasing finance from your home to pay for further improvements is an option you may wish to explore, and if you have already paid the majority of your mortgage or have built up equity in your property it may well be the most attractive one. The beauty of this option is that you will be able to choose how much finance or equity you wish to release from your property, and if you’re planning to use the renovations to add value ahead of a sale, a financial advisor will help you to calculate how much it is best to release.
Before re-mortgaging you should consider your wider financial situation and ensure you will continue to be able to meet your repayment obligations.

“At the same time, depending on the home renovations you’re looking to complete, you may wish or be able to combine your savings with another option to ensure you can fully finance the necessary work.”

A Personal Loan

Depending on your credit status and the eligibility criteria of lenders, you may be able to finance your renovations with a specialised loan. If you are planning to use a personal loan for home renovations, you should ensure you are clear on how much you wish to borrow, and decide whether you will use some of your own savings alongside the loan to pay for the work. Before applying for a loan it is worth having some quotes for the work you want done, and if possible getting the supplier to guarantee these, so you don’t end up having to find extra money later having already taken out a loan.
Don’t apply to borrow more money than you need, as you may end up paying more back in interest unnecessarily. However, if you are unsure of what you need, or have been unable to attain a guaranteed, fixed quote for the work, check with lenders as to whether you will be able to make an early repayment if possible, and any fees that may be associated with this.

Financing Your Home Renovation

Ensure you carefully explore all the options available to you prior to making any decision around financing your home renovation. You should also consider the outcomes and potential benefits of the work you are looking to undertake, particularly if you are planning to use the renovations to increase the value of your home to sell in the near future.




What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information

12 Effective Ways to Save Money on a Tight Budget

Overspending is an easy habit to get into, albeit often a difficult one to identify and a harder one to escape from. It may seem disingenuous to say overspending is difficult to identify, as after all you’re always aware that you’re spending money when you go to the shops or buy something new. However, often we do overspend without realising, and are missing the small savings that can quickly add up into a considerable sum of money.

Usually the “small savings” element prevents people looking to save, as on the face of things there isn’t enough of a saving there to justify making a real change. By looking deeper at how you’re spending your money, you can make a real difference to your life, and enjoy significant savings while living on a tight budget.

Here are 12 effective ways to save money that will soon have the savings stacking up in your favour.

1.      Check You’re Getting the Best Deals

Whether utilities like electricity and gas, your mobile phone, home broadband, or anything else, how confident are you that you’re enjoying the best deals available? Take some time to gather any contracts and bills together, then sit down and look at what you’re paying. Even if you’re able to afford your current rates with relative ease, that doesn’t mean there isn’t potential for savings.
Get in touch with all your service providers and discuss the options available for saving money. If you’ve been a customer for an extended period, there will usually be loyalty offers available for you to take advantage of, particularly if you subtly indicate you might be considering taking your custom elsewhere.
As an extension of this, you should look at things you’re paying for that you don’t really need. Netflix and Spotify are great services and fun to use, but do you really need them? Is your child’s monthly subscription to Club Penguin giving you value when they can play other games free?

2.      Turn Everything Off

How many times have you read this piece of advice? Despite there being a wealth of knowledge online about the potential benefits of ensuring electrical items are fully turned off – not left on standby – and even unplugged if possible, many are still guilty of not heeding this advice. If you have two or three televisions in your home, a computer system, and a music system, all left on standby, you could be spending a small fortune on electricity while not even using these!
If this sounds a familiar scenario to describe your home, consider investing in energy saving plugs or adaptors that cut the power when it recognises something isn’t being used or is on standby.

3.      “Winterize” Your Home

Though it depends where in Australia you live, it might be unlikely that sealing up any gaps around doors and windows using draught excluders or other products will mean you can go all winter without switching on the heating, but it will mean you will use the heating less as your home is heated more efficiently. Either invest in the products available in the shops or create your own DIY solutions to ensure you’re not paying for heat that quickly escapes your home.

4.      Buy in Bulk if You Can

Buying in bulk might cost more at the time, but you soon see the savings as you need to purchase less often and your purchases last longer. Whether it’s taking advantage of bulk buying deals at the local supermarket or switching your shopping location to a nearby cash and carry, significant discounts can be enjoyed.

“Buying in bulk might cost more at the time, but you soon see the savings as you need to purchase less often and your purchases last longer.”

Before buying in bulk be sure to consider whether it will really work for you. Buying perishables that expire quickly, for example, isn’t a good idea if there is only two of you and you’ll never use something before it goes off. However, you can always save money buying non-perishable items, whatever your situation, so should take advantage of the products and deals available.

5.      Shop with a List

Shopping without a list is a little like shopping when you’re hungry; you inevitably end up buying things you don’t need, probably overspend, then end up wasting food when you don’t use it and it expires before going in the bin.
The other scenario is that you don’t buy everything you need because of not having a list, then end up spending more money at a nearby convenience store, having takeaway, or eating out. Take a shopping list every time you head to the supermarket, and be sure you’ve covered everything you need up until the next time you plan to shop.

6.      Use Coupons and Price Matching

Whether it’s shopping for groceries, clothes, or anything else, there is usually a saving to be enjoyed if you look hard enough. Instead of blindly heading out to buy things and paying the price on the shelf or on the label, take some time beforehand to research what coupons and price match deals might be available.

7.      Go Vegetarian

Often students will turn vegetarian to save money on the high cost of meat, but it is an option open to everyone at any stage of life. You can choose to ‘go meatless’ completely, or if meat is a large part of your diet and one you don’t wish to totally give up, you can designate meat free nights at home to cut back and see some savings.

8.      Enjoy the Park

Costs of children’s clubs and activities can be prohibitive, particularly in busier urban centres where such services are in high demand and usually very popular. Despite these clubs and activities offering a welcome service and providing excellent engagement for children, much of the time you can do all the same things free in the local park or area of open space. Instead of paying a premium for clubs and activities, get friends who have children together to enjoy meet-ups and your own social occasions filled with sports and other activities for everyone to get involved in.
The same principle applies for yourself if you’re paying out for a gym membership every month. Do you really need it?

9.      Group Deals

Keeping the spirit of community alive following your meet-ups with friends in the park, whether you’re doing things with the kids or on your own, using discount websites and taking advantage of group buying deals is a great way to keep your social life active while also saving money. Many people believe living on a tight budget means waving goodbye to any kind of social life, but this doesn’t have to be the case.

10. Consider How You Travel

Do you drive everywhere and pay out for fuel when it might be cheaper to take the train or the bus? Do you take the train or the bus for relatively short trips when you might be able to walk? Assessing how you travel can make a great difference to your finances but also make you fitter and healthier. If driving is essential, are you getting your fuel at the cheapest possible price, and are you getting the best deal on your vehicle insurance? If you do get the bus or train, are you buying the best advance or season tickets to save you money?

11. Cut Back on Eating Out

When you eat out, food, and drinks even more so, are subject to an extensive mark-up. You should really look to cut back on eating out altogether, but if this is a part of your social life, at least think about how often you do it, and what you buy when you do. Opting to drink water instead of another drink is the easiest way to save money, while choosing larger sharing platters and meal options is also often cost-effective. Another option is to eat out on nights when special deals are available, or at locations offering two meals at a set or discounted price.
Include the cup of coffee you buy on the way to work and the muffin on the way home in this, too. Eliminating these will save you a good sum of money over time.

“When you eat out, food, and drinks even more so, are subject to an extensive mark-up. You should really look to cut back on eating out altogether, but if this is a part of your social life, at least think about how often you do it, and what you buy when you do.”

12. Buy Second Hand

Buying something new and ‘box fresh’ is always a great feeling, but there are always bargains to be found at charity shops, garage sales, and other second hand stores, no matter whether you’re shopping for clothes or a new television for your home. You’ll save a significant amount of money adopting this outlook, and if you’re shopping for clothes, vintage trends and wearing reclaimed garments is all the rage right now anyway.

Saving Money on a Budget

While none of these 12 tips are likely to prove a ‘silver bullet’ for your finances on their own, if you put them all into practice they’ll add up into what could be a significant sum of money, depending on your current spending habits and regular expenditure. Take the time to consider where your finances could be better utilised, and become adept at saving money and managing your budget effectively.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information