More often than not, people are unaware of ways that spending can benefit their bottom line. Saving money is, after all, as much about shrewd spending as it is about careful cutting.
David Rankin, founder of a personal budgeting service, stands by the idea that healthy financial habits are the key to money mastery. Here he’s outlined the 10 things you should be spending on so you can save more in the long run.
1. Discount supermarkets
For most of us, groceries account for the lion’s share of our day-to-day outgoings. If we handed over this much money for anything else, we would think very carefully about who we gave it to.
The ‘Aldi effect’ is rapidly becoming a recognized way of dramatically reducing your food bill. Spend up big at your local discounter, top up at a full-price outlet and don’t set foot in a supermarket for another seven days.
2. A 0% balance transfer credit card
Banks are falling over themselves to create an interest-free environment to help you to repay your debt. Is this too good to be true? It doesn’t have to be.
What the banks actually want is for you to bring your credit card balance along with your bad habits over to them, so they can clean up on late repayment fees and the like. By hiding your new card away in a shoe box and maxing those 0% repayments, though, you too can be laughing all the way to the bank.
3. A car loan for a car – not a personal loan
If you’re buying a car, don’t finance the purchase with a 15% personal loan, if you can pay a fraction of the interest with a car loan instead.
Overall, you might even be better off buying a somewhat newer vehicle in order to meet the car loan criteria, rather than paying a sky-high unsecured personal loan interest rate for an older car.
4. A competitive home loan
It’s the biggest financial commitment most of us will ever make, so a small reduction in our mortgage interest rate can bring big benefits to our bottom line.
Bells, whistles and specials are all well and good, but they can distract us from the main game, which is an ongoing low home loan interest rate. If you’re paying $400 a year for a loan package fee, make sure you factor it in when comparing your current loan with a bank that doesn’t charge fees.
5. A coffee machine and great quality coffee
If you’re spending to save, don’t forget to include the good things in life, because enjoyable habits are very likely to be sustainable. $250 will get you a good machine, and $15 will buy you a kilo of premium coffee. If you already have a daily habit, this could be the best investment you ever made. Wake up and smell the coffee: day after day.
6. The right mobile phone data plan
A tight mobile phone data plan often turns out to be a false economy. If you bought tailor-made clothes for the kids, you’d know there would be extra to pay. With the wrong data plan, you’ll be paying extra on a regular basis, in order to finance a monthly data blow-out. In our mobile-streaming reality, a generous data plan can turn out to be a wise investment.
7. A film streaming subscription
They are already proving to be a game changer – not least for household budgets. Competition among providers has intensified, and the consumer has never had it so good. This low-cost investment will help you to slash your discretionary outgoings while still keeping you entertained.
8. LED lighting
By now, you have probably ‘switched’ from traditional bulbs to energy-saving globes. When you did so, though, did you leave your halogen bulbs in place? If so, it’s worth knowing that halogen can use significantly more electricity than an LED globe or downlight to produce the equivalent amount of light – potentially translating into hundreds of dollars of unnecessary costs in the course of a year. Time to finish the job properly.
9. A platinum credit card
If platinum credit cards sound expensive and superfluous, think again… especially if you are planning to travel overseas. With annual fees of under $100 and free overseas travel cover underwritten by reputable insurers, why would you leave your country without one?
Okay, so you can’t really classify a complimentary app as an investment, but it can save you serious money, hence its inclusion in this list. Why buy eBooks or audiobooks ever again, when – if BorrowBox is available through your local library – you can access its collection for free. At anytime from anywhere. What’s not to love about a free app?