Nine Highly Effective Saving Techniques
Frugality not your forte? Take a cue from these two smart homebuyers, who managed to save for and purchase multiple homes at such an early age.
Eddie Dilleen purchased his first home when he was 19, and now owns 13 properties at age 26. Although some might assume he inherited them all from an inheritance, each property was purchased using savings and careful planning on his part.
“Growing up in housing commission was difficult financially for our family. To get an apartment sooner rather than later, I started working at KFC at age 14, before later working for McDonald’s.”
Eddie may not have been (and still isn’t!) as forward thinking or frugal as most of us, but there’s still much we can learn from his example when it comes to entering the property market.
Eddie and Lauren Robinson shared their top saving and budgeting tips.
1. Eating Out Can Deplete Budget
Most budgeters agree that eating out is one of the key expenses to consider when setting a savings goal.
Lauren, who purchased her first home at 22 and now owns three, found that this change had little if any ramifications on her lifestyle but had an immediate positive effect on her bank account.
“Oftentimes you don’t realize where your money goes,” she stated. “For example, buying one coffee each day for $4 costs at least $30 every week–something so small can quickly drain your account.”
Although reducing coffee intake won’t suddenly save you $20,000, it could save at least 5% – quite an impressive savings considering such an easy adjustment!
2. Share What You Can
Find things you can share with friends, family and housemates. Many millennials already take this approach with sharing Netflix accounts or UberPool as ways to reduce transportation costs; going a step further by sharing clothes or other personal belongings could also prove fruitful.
Lauren chose not to buy new clothes each week; instead she swapped with friends in order to keep wearing something “new”, Lauren says. If they went out together she could still look presentable without breaking the bank every time!
Consider renting outfits for special events, like weddings, to avoid incurring additional expenses at each occasion.
3. Make wise swaps When going out with friends, consider swapping expensive items for cheaper alternatives. Lauren would organize coffee and walks instead of dinner and drinks – still seeing her friends, just spending less!
Eddie would opt for beer over costly cocktails when planning his evening out on the town.
4. Set Your Saving Goals Saving is all about goal setting; Lauren started by speaking to a home loan expert to find out what loans they would provide her and how much of a deposit she needed to put down on an apartment.
“First I calculated what savings I already had and the gap to reach a deposit amount; taking into consideration that my goal is to purchase within 12 months, it then determined the weekly saving goal,” she states.
Lauren found herself saving half her paycheque each week – but managed to achieve her goal!
5. Utilize Technology
Tracking spending and saving is key to setting and meeting goals, such as Lauren’s use of ASIC’s TrackMySPEND and Pocketbook apps as her budgeting aid, while Eddie kept things straightforward by sticking with an Excel spreadsheet.
6. Evaluate Your Mobile Plan
Lauren recommends reviewing both your phone and internet plans to make sure that they offer maximum value. Consider going prepaid as this could significantly cut costs in this area.
Concerning energy costs, such as electricity and gas, it’s always worthwhile discussing possible price cuts with providers to see if you can secure a better deal.
7. Stay within Your Means Its Eddie takes an analytical approach when purchasing new things; he considers all his purchases pragmatically (‘does he need it and for what purpose?) before succumbing to trends or luxurious indulgences.
“All my friends were buying expensive sunglasses or phones that cost $150; instead I purchased $20 pair instead – this had a profoundly compounding impact over a 10- to 15-year time span,” says he.
8. Be disciplined… but not too much!
Overextending yourself will likely result in burnout and frustration. While living within your means when saving is essential, budget for some indulgences every now and then; Lauren opines: “The budget can’t do everything.”
9. Mind Your Attitude
Eddie recommends keeping an optimistic approach when it comes to money matters and savings strategies; doing what you can when possible and expecting the return over time will eventually pay off.
“Sometimes people feel overwhelmed and give up before even giving it a try; however, depending on where you live it can feel very challenging to enter the property market,” says Mr. Hazelton. “However, people shouldn’t give up; work up step by step towards something,” he advises.
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