Savings Smart Guide

2. Start saving

What you'll learn in this step: simple changes to your lifestyle can make a big difference.

So you reckon you haven't got anything left over to save? Sometimes it's the small things that count. There are plenty of ways to adjust your spending to make savings that can quickly add up to a worthwhile sum over a week, a month or a year.

Day-to-day

• Bring your lunch to work. People generally spend about $10 a day that's $50 a week buying their lunch.
• They may be skinny, but those lattes and cappuccinos can add up one in the morning and one in the afternoon could come to a fat $50 to $70 a working week.
• Cut down on takeaway meals you may be home late, but a $1 bag of pasta takes half the time to cook than the $12 Thai meal you'll have to wait 20 minutes for anyway.
• Shop weekly at the supermarket, not daily at the corner store where prices can be a third higher.
• Don't shop when you're hungry you'll buy more food.
• Buy fresh food. Pre-prepared convenience meals come at a premium.
• Check out home brands. There's often little difference in quality but a big difference in price.
• Consider shopping online there's a service fee, but you won't be throwing spur-of-the-moment purchases in your trolley.
• Car pool to work or school.
• Do your lungs and wallet a favour: stop smoking. If you're burning $5 a day, that's $35 a week, or $1820 a year. You'll also qualify for lower health insurance premiums.
• Subscribe to magazines and newspapers rather than buying them at the newsagent. Subscriptions are usually cheaper.
• If you're a regular, season tickets for entertainments such as the theatre or sport are cheaper than buying the individual tickets.
• Borrow books from a library or visit a second-hand book store.
• Shop for clothing and electronic goods at factory outlets and clearance centres.
• Buy furniture at auctions.

Big-ticket expenses

• Are you on the best plan for your home phone, mobile phone and internet service? Some providers offer discounts if you bundle your services with them but make sure it really is a better deal than offered by separate providers.
• Shop around for your car, health, home and contents insurance when they fall due instead of just automatically renewing them. There's a lot of competition for your business, and there are discounts for bundling. (See our step-by-step guides to insurance.)
• Is your mortgage suited to your needs? You may be paying a higher interest rate for bells and whistles you neither ring nor blow. (See our step-by-step guide to buying a home).
• Work out which type of credit card is better for you. Go for the interest-free days if you pay off your balance each month, otherwise find one with a lower interest rate. (See our step-by-step guide to credit cards.)

Read more about:

Claw back your money, David Potts, July 16, 2006 The Sun Herald: There are plenty of ways you can save without depriving yourself.

Women's business, Lucinda Schmidt, April 23, 2006 The Sun Herald: Women, with their push for independence and self-provided security, are thirsty for the money-management know-how that will help them secure their future.

Bank fees

A recent survey uncovered more than 100 different fees imposed by banks and other financial institutions, so analysing your banking habits and working to avoid fees can leave you with a meaningful sum. Here are some suggestions:

• Use your own bank's ATMs and avoid the fee for using a competitor's.
• Use the internet rather than a branch for your banking, as online fees are lower.
• Make sure the type of account suits the way you bank if you transact frequently choose an account with a number of transactions built in, rather than one with a fee for every transaction.
• Some account banking fees are waived if you have a mortgage with the bank check whether you qualify.
• Limit the number of withdrawals you make on your account. Don't draw small amounts frequently but a larger amount once a week.
• Withdraw cash when you're using Eftpos for shopping or petrol and save a separate transaction fee.
• Scheduling an automatic transfer via internet banking may be cheaper than arranging a direct debit.

Read more about:

Westpac's $2 shop, Michelle Innis, February 14, 2006 The Sydney Morning Herald: With ATM transaction fees on the rise, Michelle Innis looks for ways to cut the costs.

Pay no bank fees? It's as easy as CBA, David Potts, March 5, 2006 The Sun Herald: David Potts's survival guide to frugal banking.