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Saving Money on a Tight Budget: Practical Tips

Saving money might not seem doable when you’re living on a tight budget. Yet it might not be as difficult as you think. Even little lifestyle modifications can be beneficial. You simply need to make a small effort.

Whether you’re trying to pay off a debt, accumulate an emergency fund, make pension contributions, or anything else, you still have to make conscious efforts to increase your savings. 

Here are some ideas and methods to help you review your spending plan and discover some fresh approaches to making your money go a little farther.

Understand Your Finances

Assess Your Income and Expenses

Spend some time reviewing your budget plan at least twice a month. Verify that your spending and saving objectives are on track. Consider strategies to cut back on unnecessary expenses, if there are any. When money is tight, it’s important to regularly check your budget.

Saving Money by Creating a Budget

Saving Money Little Miss Organised 2

Setting objectives is one of the best strategies to keep yourself motivated to save. Try to set aside a certain amount each month and attempt to save if you want to do something out of your tight budget, like dining out.

You can also stop making the digital payment and put the money in your savings account. Even if you have a small income, you can reach your target savings by creating and sticking to a budget plan!

Track Your Spending

Start by taking note of every penny you spend if you’re having trouble setting up a budget and making savings. Try maintaining a spending notebook to keep track of your spending and anything that leads you to buy. Finding areas to cut back on spending is simpler if you are aware of where your money is going. Hence, one of the simplest tips for saving money on a tight budget is to keep track of your expenditures!

Saving Money by Changing Your Spending Habits

Avoid Impulse Purchases

Place your wants on hold and distinguish them from your needs. Pause your shoe or handbag purchase for the time being. You’ll be astonished by how much money you may save by buying just the things that are truly necessary.

This practice will also provide you with an opportunity to grow more conscious of your expenditures and help you organise your finances.

Use Coupons and Discount Codes

You can use coupons for saving money on your purchase. By using all of your coupons, you might wind up saving hundreds of dollars.

Coupons are a fun way to obtain deals on items you might not have been able to afford in the past. Also, coupons contribute to your savings by reducing the number of goods you buy. 

Additionally, promos can help you save a large amount of money on your shopping when used correctly. Carefully using codes that are applicable to your needs and lifestyle is the key. With a little forethought and strategy, promos can significantly impact your budget.

Saving Money by Buying Items in Bulk

Make sure you go food shopping with a list if you want to succeed! By doing this, you can stay on budget and be less inclined to stray from your buying goals.

Also, you should review everything on your list in advance and think about purchasing items in bulk. But don’t buy more than you need for a week. By doing this, you’ll cut down on waste and prevent having food left over.

Coping With Unexpected Expenses

Budget Plan Little Miss Organised

Create an Emergency Fund

It is quite tempting to cut back on your coverage to save money on insurance. But you have to be careful because a decent insurance policy will help you get back to your normal life much more quickly without hurting your finances if there is an accident that damages your car or house.

Seek Financial Assistance

You should feel confident seeking assistance when you are in need. Whether it is the free farmer’s markets, school supplies, food banks, giveaways, hospital charity, and more.

Some charities enjoy better financial assistance than others. However, you should make use of any resources you have at your disposal. And when your circumstances improve, you can always give back to the organisations that helped you by volunteering your time or money.

Listen to Kelly and Bonnie on the Budgeting and Bill Paying podcast to learn more about saving money:

https://youtu.be/uMd1YiEeTXY

Kelly:

Destiny’s Child learning about the bills, and I don’t blame them. Are your bills on the fridge? Maybe you’ve got a stacked in trade that gets higher and higher each week. Perhaps you’re using a tried and true horizontal or vertical filing draws method of bill payment. Well, let’s drag you kicking and screaming into the 21st century. And the woman who’s going to grab you by the scruff of the financial neck is Bonnie Black from littlemissorganized.com Au. Hello.

Bonnie:

Hi, Kelly.

Kelly:

What are the benefits of going digital when it comes to bills?

Bonnie:

You’re just so much more organised and you’ve got these wonderful things called alerts and alarms that tell you a bill is upcoming, because a paper bill cannot tell you, I need to be paid. I’m overdue. You’re going to get a fee if you don’t pay me right now. So going digital can save us so much money on overdue fees.

Kelly:

Most people, I think, now still request they request email bills because it usually doesn’t cost you, whereas a paper bill now will. So, are most people sort of going to email?

Bonnie:

Look, I think it depends on the generation, because there are some generations who are very stuck in their ways and they don’t like the fact that everything’s going digital. So the fact that the government’s doing my gov and Centrelink online and all those kind of things, people are really kicking their heels in about that. But I think it’s the way that the world is going, it’s much easier to just do everything digitally. It saves the trees, it saves us loads in paper and printing costs. So why not? I think a lot of people do want to go that way because they are sick of the clutter and they’re sick of having those piles of towering papers.

Kelly:

So, Bonnie, do we need a separate financial calendar, digital calendar. So not put it where you’re putting all your, oh, we’re having dinner with the breeze on Thursday night. That’s not where you put it. You put it somewhere where it’s going to make an impact when you see that alert come up.

Bonnie:

Yeah, definitely. So using a digital diary is great for anybody’s life, no matter whether you’re a stay at home mom or a working person working in the corporate world. So actually having a coloured calendar, that’s personal, one maybe for each of your children, one for your husband, if you’re a big volunteer person, you do a lot of volunteering, have a volunteering calendar, and then definitely having a bills or a finances calendar will really help you get organised.

Kelly:

Yeah. So, even with that sort of organisation, I have everything in a calendar for work and another calendar for personal. But then on my fridge at home, I have one of the whiteboards sitting there with who’s doing what. So that at a glance every day, I’m reminded about what the week entails.

Bonnie:

And look, I think that actually requires an extra level of organisation to be able to do that as well as your digital stuff. So, you’re ahead of all of us.

Kelly:

Well, yeah, or I’m double handling everything, which also happens.

Bonnie:

You could say that. But at the same time, some people need that visual reminder, and sometimes on your phone or on your tablet is not enough. So if you are organised enough and you can stay on top of it week by week, then I think go for it and do it. But I think for a lot of people, it’s probably not achievable.

Kelly:

So when people are starting to get organised with their bills, what advice do you have? Where do you start with all this?

Bonnie:

So the first thing to start with is to actually do a big cull. So especially if you’ve been doing paper for a long time and you’re wanting to plan towards digital, you really need to do a big cull. So work out with your accountant what papers you actually need for your tax and what other papers you might need for Centrelink and those kind of things, and then just do a huge cull.

For most people, we only need to keep the last rates notice, the last household bill, and the last bank statement. Most of us can actually access our bank statements for the last two years at the touch of a button. We don’t need to have folders and folders of bank statements and financials for the last 10-20 years. And we come across that a lot in our work, actually. People who have that fear factor of, what if I get audited? I’ve just got to keep this stuff just in case. And the reality is, you really don’t need it. So anything beyond the seven to ten years, depending on what the document is, definitely doesn’t need to be kept.

Kelly:

Well, I suppose the other thing is you can scan it. Yeah, like if worst comes to worst, just and you’ve got heaps of paper and not a lot of space, just scan it into computer and be a little bit organised in your computer, too, about where you’re putting things.

Bonnie:

Yeah, absolutely. And there are actually companies now who will do that stuff for you, who will go and scan things for you. And there are assistants that you can hire for fairly cheap to actually go and do all that scanning and to set up that digital filing system for you. And how much easier is it to find a bill when all you have to do is type in a key search term rather than shifting through stacks of paper? I know I paid that bill six months ago. This is that pile from back then. Where is it amongst them all now?

Kelly:

What about paying on time? What are you doing there to make sure that that happens?

Bonnie:

So, if you’re going digital, setting an alarm is really important, but also making sure that you’ve worked out your budget. So for a lot of people, they don’t have a yearly budget. And so when a bill comes up, that’s quite a big one, and especially if you’ve got private health insurance and you pay monthly like mine is, it’s a good chunk of money, like, it’s nearly $400. And if you haven’t budgeted for that that can really hurt your pocket. So say you get paid fortnightly, and you’ve got a big bill like that that comes monthly. Work it out in your budget so that when your fortnightly pay goes in, you’ve set aside half that monthly cost so that by the time the bill comes out, it’s actually already set aside, and it’s not okay. We’ve got $50 to live off this week.

Kelly:

Which is difficult.

Bonnie:

It is very difficult, and living week to week is really stressful for families. So if you’re already feeling like you’re a bit disorganised and a bit clutter filled, then living week to week on your paycheck because you’re not organised enough with your bill paying is a really bad idea.

Kelly:

Now, there are places you see the advertisement where they’ll be saying, we’ll help you with your budget and we’ll do this, and blah, blah, they get paid for their service, which is fine. Good. O, but there are free templates for those who can’t afford to do that.

Bonnie:

Yeah, absolutely. And, I mean, I’ve tried a few different budgeting systems myself and never really found one that I loved, but one that I have found that is free is the one from the government called money smart, and you can actually get it as an app on your phone and tablet. And what it is, is it’s a template set up in excel, and it’s colour coded, and it’s actually kind of pretty looking, which, to be honest, a lot of the government websites and their stuff is not real appealing.

And it’s really good because it breaks it down into a different category. So your financial responsibilities, your shopping, all those kind of things, it just breaks it down. And it’s a template that you can actually type into, and then you can click drop down buttons to say whether it’s an expense that’s fortnightly, weekly, monthly, quarterly, whatever, and it just does all the numbers for you. And then it tells you once you’ve finished filling it all in, at the end of every year, you’re this much in the deficit or you’re this much ahead. Well done. And it’s really good that way.

Kelly:

Okay. 1300 222 612. If you have a particular system or way of doing things that works for you when it comes to bill paying, share your genius with the rest of us. 1300 222 612. It’s a quarter to three, Russell at Burpen Russell, hi.

Russell:

Hi. How are you going?

Kelly:

Good. How do you do with this?

Russell:

Well, I’m at an age where I don’t have to worry about it now, but growing up to this age, we worked out, we correlated all our bills, utilities, weekly, monthly, twelve monthly all that everything that we had to pay out during the twelve months of a financial year, right?

Kelly:

Yes.

Russell:

Then we divided it by 52 and come to XYZ dollars. So every week when I got paid and my wife got paid when she was working, we had an account set to one side saying, every week we’ve got to put in ABC into that account.

Kelly:

Right. So, you had a bills account and you had the, okay, we can go to dinner on this, and the rest of it, however, that belongs to somebody else.

Russell:

Right. As long as we put that aside every week, we know whatever’s left over is us to go silly with or not. It was like we had everything covered. And it takes a lot of thinking because you got to think about rates, you got to think about power, you got to think about water, and you got to think about registration for your cars and all that sort of stuff. It took us a while to sort of really wrangle all that we owed. Because your bills are every quarter or one every six months or once every twelve months, whatever.

Kelly:

Yeah.

Russell:

But once we wrangled them all together multiple and added them all up, divided by 52 equals XYZ, the amount of dollars has to go into your bill account every week.

Kelly:

All right.

Russell:

It’s very disciplined. You have to be disciplined. But it saved us a lot. It took the stress out of it all over.

Kelly:

All right, Russell, thank you for that. And Bonnie. That’s it. It’s that initial organisation, isn’t it? And that’s sort of what Russell was alluding to there that just started up. It’s a pain, but there was long term benefit for them to do. That the stress out of it in the end.

Bonnie:

Yeah, absolutely. And good on you, Russell, because you’re using the system that we are using at our house, and it took us a good three months to fine tune it because there was little things that changed the rates of them, or we just had to fine tune a few things. But once we got it down pat, it makes it so much easier. And now if there’s that little bit of surplus in the account oh, great, that’s exciting. And I mean, we’re big savers, so we’ll put that into savings usually rather than spending it, but it’s just such a wonderful system, it takes the stress away.

Kelly:

Yeah. Michael at Redland Bay, Hello. What did you do?

Michael:

Yeah, this is my wife and I. We’ve got a company that takes care of our finances and all that sort of stuff. Now, we signed up on the 1 July last year and we’ve been really happy. I mean, we’ve saved up enough money to be able to go on a Europe trip in two weeks’ time.

Bonnie:

Oh, well done.

Kelly:

Right.

Michael:

No need a nanny.

Kelly:

Keep saving. We’ll both go with you. So, without mentioning the company name, what did they do that you couldn’t do yourself? And I don’t mean that as a slag off again to you, just this is obviously something that helped.

Michael:

Look, the way they set it up, they set up an account for you and all your pay goes into their account that they’ve set up for you. And they give you a living expense account, which you might nominate $500 a week to live off, and they pay for everything, your rent, your insurance, whatever they accommodate for all that. You tell them that you want to go on a trip, you want a six grand saved up by a certain date, and they’ll make it happen. And that’s what’s happened to us. And now we’re going on a four week trip to Europe in two weeks.

Kelly:

All right, well, have a great time.

Michael:

If it wasn’t for the company, we wouldn’t be going anywhere, wouldn’t be doing it. 

Kelly:

All right. Michael at Redland Bay. So that’s interesting. That has worked for them as a way of saving and of being disciplined about it.

Bonnie:

Sounds like a fairy godmother.

Kelly:

But I suppose if you’ve said to somebody, all right, this is what we can live on, and we want to sort ourselves out. And I imagine for people with maybe a lot of credit card debt too, that’s a way of doing it, because if you see that amount and you think, I’ll never bring that down again, there’s that disincentive to actually do anything about it because it seems overwhelming. But for those who can see that a long term project or a lot of short term pain, if you’re able to, then that’s just about getting organised, isn’t it? Right. This is what we’re doing.

Bonnie:

It’s just about your priorities, I think, because some people have other different priorities to what we might have, and that’s okay, but you’ve just got to work that out according to what your budget and your priorities are.

Kelly:

From the Gold Coast. Hello, Trevor. Whoops that helps. Hi, Trevor.

Trevor:

Hey, how are you doing?

Kelly:

Good.

Trevor:

Just being aware that banks with their credit cards have a very narrow window for your payment that they accept in, which avoids the late payment fee because I found with me because I’ve got a credit card that I use for work. So as soon as I get my work reimbursement, just like a straight on the credit card, I got a late payment fee because there was a balance on the card and my payment was not during their window time, even though the amount of money I paid outside of that window was huge.

Kelly:

That’s interesting. Maybe ringing them up, saying, hey, what’s your story?

Trevor:

There was a few explicit yeah, there was quite a rigorous conversation.

Kelly:

All right, so you’re talking auto transfer. So, things that go through- 

Trevor:

What I do now is I have set up within my savings account, I got a couple of sub accounts which I use for different purposes, but one of them has automatic payments. So even though I still make I’ll get my expenses paid in a day or two, and I’ll automatically put them onto the credit card sometime between after the 15th, between the 15th and the 25th. I will also have a small amount go directly onto my credit card. Directly. Just avoid that $25 late payment fee.

Kelly:

All right, Trevor. Thank you. That’s one of the other things that’s interesting is that bills now, they don’t all come on the same date from the same provider. So say it your energy company. It’s not always the 13 May or the 13th of whatever month it is. That’s crap. Deliberately. Yeah. It messes you up so that this system becomes a bit trickier.

Bonnie:

I sense a lot of passion behind.

Kelly:

This because it’s annoying and it makes it difficult to do this. And that’s how they get these extra amounts because you can’t say, right, that’s due on that date. That’s not how it happens.

Bonnie:

No, but one of the tips that people can really utilise is a lot of companies now will allow you to make a bit of a prepayment. So say you’ve got your registration and now you can break your registration down and pay every three months instead of paying six monthly or twelve monthly.

A lot of companies, like our gas company, will actually allow us to prepay our accounts so that by the time the quarterly bill comes up, we’re actually only paying like $50 instead of 400 $500 bill. So we do that with our rates as well. So normally you normally get an $800 $900 rates bill. But now, because we have worked out what our bill generally is, we’ve broken it down to our fortnightly payments. Now our bill is less than $100 every time it comes in because we’re automatically taking that money out every time.

Kelly:

A messy trim cat on the Sunshine Coast who says, I’m returning to important paper invoices after two recent experiences. I lost three months of documents after my computer crashed. And then during a recent house sale, we were able to produce the hard copy file with pest inspection invoices dating back to 1999. Wow. Really? Somebody wants you pest.

Wow. Okay. I can’t produce electronic files from 20 years ago. That’s true. Clinch the sale. I do use electronic and scanning for our accountant. Accountant budgeting is a no brainer. So there we go. And another one from Cindy saying, I do what Russell does, but I add five to 10% to cover bill increase each year. I have all direct debit out of a bill money account as soon as I get a bill or electronic bill, I BPAY it from my internet banking straight away. I’ve been doing this for a few years now, and don’t stress on it. Also, my bill account I have no access to except via internet banking.

Bonnie:

Yeah, that’s clever.

Kelly:

It stops you from using your card and just going just because now you paywave everything and money doesn’t really exist.

Bonnie:

That’s so true.

Kelly:

Yeah. It’s just an idea we have. It’s not actually real. Yeah, but that’s made a change, too to your spending habits, because if you’re not seeing it in your purse or your wallet taking it out, it’s kind of like, oh, just poke. And it is convenient. I love Pope. Don’t get me wrong, I don’t mean to be old fatty duty person here, but it does change the way you think about money until you see how much you’ve got left to go. Wow, that was a lot of coffees.

Bonnie:

What I think has worked really well in our household is we have those two main accounts. So one is everyday account where the bill, you know, the money is coming in, and then we have all these automatic transfers that set up and go straight into our bills account. To put aside that money for those bills. And then anytime we need to use money, we just have access to that everyday account. And every time we buy something, we know, okay, that’s got to come out of the bills account, or that comes out of our holiday or our savings account, and we reimburse it. So we’ve got all these transfers going in between our sub accounts. But record keeping wise, we know exactly what money is going where.

Kelly:

Wendy is on the Sunshine Coast. Hi, Wendy.

Wendy:

Hey, how are you going?

Kelly:

Good. How do you organise your utility payments?

Wendy:

Yeah, for our water bill and also our electricity, I think one time we got an electricity bill, it was about October, so it would have been through the winter, and it was something like $700. And I almost had a heart attack. From then on, I said, they actually called, I don’t know what it’s called. They’ve got some name for it, but they worked out monthly what an amount on average? I think they averaged our twelve months of bills.

Kelly:

Yeah.

Wendy:

And they said, right, let’s pay this monthly, so we pay that on our credit card monthly. And I think the last bill I got was negative.

Bonnie:

I love that.

Wendy:

But the other thing I was thinking, read that bills account, we could probably just pay that money that they designated into that bill’s account so that we’re getting the interest and not them, and then we’ll be better prepared. So maybe that’s made me think now that maybe I should now that I know what the amount is, just do it in our account. Because obviously if we in credit, we don’t get any credit for that.

Kelly:

No, you don’t. They’re getting your money early.

Wendy:

Utilities, the water does the same. They call it a big smooth pay or something. And we pay a set amount each month. But it does negate the bill shock, I guess, of getting a shocker if something’s happened or changed. Because obviously summer and winter with both of those, they do vary a bit.

Kelly:

Well, the other thing is that some electricity companies will guess your bill, which they’re allowed to do legally, and then all of a sudden they’ll go and measure it. And you’ve bumped up $200 because, oh, look at that, we underestimated what you were using.

Bonnie:

Bill Shock.

Wendy:

Yeah. Wasn’t that a guy called Bill Shock around you?

Kelly:

Well, we all get it now. Thanks, Wendy.

Wendy:

All right.

Kelly:

That’s great though. And obviously people find systems that work for them, but for those who don’t, this can be an ongoing issue. And now for those who do like paperwork, how do we organise that then? Let’s say, okay, digital is not for you, it’s just not working for you. How do people organise their paperwork properly?

Bonnie:

Well, look, I think most people need to have some sort of hard copy, paperwork, filing anyway, because you can’t go digital with your marriage certificate new, but those kind of things. So you need to have some sort of system anyway. But the first thing to do is obviously do your cull and then work out what the system is that you want to use. Are you the sort of person who likes putting everything on the fridge? Do you like ring binders? Do you like the filing drawers?

Do you like horizontal drawers? Work out what system will work the best for you once you’ve done that paper cull, then you can actually go and set up your categories once again, categories that make sense to you, whether you want to organise your child has a ring binder each, or you want to do all your utilities in one ring binder. You want to do important documents like your birth certificates, death certificates, all those marriages will, that kind of stuff in that one important documents, ring, binder, whatever it is, do those categories that makes sense to you, and then pop the paperwork in there, and then just stay on top of it.

So, if you’ve got an intra where your mail is coming in every day, don’t just dump it in there to open at the end of the week. Open your mail every day, recycle the envelope straight away, because that’s getting rid of half of your paper clutter straight away, and then actually work out what you’ve got to do with that bill. So, if it’s due, let’s highlight it. Let’s pay it right now. If it’s not due for another two weeks, let’s put a reminder in my phone.

Kelly:

Yes, Bonnie, always great having a chat with you. Thank you so much.

Bonnie:

Thanks, Kelly.

Kelly:

Bonnie Black is from littlemissorganised.com.au

Conclusion

There are several ways to save costs when you’re on a tight budget. You don’t have to deprive yourself of your basic needs to increase your savings. There are probably one or two digital payments or spending patterns you can immediately cut from your budget plan.

Lowering your recurring costs can be particularly beneficial because you’ll save money each month rather than just once. Also, remember that saving money is a long-term objective. So avoid making mistakes that might cost you significantly in the long term and undermine all the work you’ve achieved. 

Do you need to hire a professional organiser or cleaning service to help you save money in your home? Get in touch with Little Miss Organised today!

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