Simple strategies that could help you save a small fortune

The time is now to kickstart some healthy money habits so you are financially better off in 2020. These are some simple ways to get started.

We’re already three weeks into the new year and it’s likely most of us have broken our new year’s resolutions.

But, as they say, it’s never too late to start good financial habits.

January is the perfect time to set yourself up financially for the year ahead and try and minimise the stress on your hip pocket.

These are four simple things you can do now to save yourself some serious cash and hopefully leave yourself a little better off.

1. SET UP A SAVINGS PLAN

Start sooner rather than later.

The best way to save is by setting up a direct debit into a separate bank account away from your everyday transaction account.

Out of sight, out of mind.

Work out what you need stashed away by the end of the year and then work backwards.

For instance, if you need $5000 saved up, with about 49 weeks to go this means tucking away about $102 per week.

Leaving the money in a high-interest savings account usually works well and ideally somewhere that you cannot access it easily.

Putting a stop to unneccesary spending will help take the pressure of your hip pocket.

2. BUY CHRISTMAS STUFF NOW

The post-Christmas sales is the ideal time to stock up on items that you need every festive season.

This includes wrapping paper, tags and cards.

Work out what you need and grab it before stores remove these items altogether.

I’ve scored myself a stash of goods which had discounts of up to 75 per cent on them. By Christmas this year no-one will have any idea you purchased the stuff in January.

3. CUT UNNECESSARY SPENDING

If you’ve got what I call leakage spending happening from your account, it could be worth putting a stop to it now.

It could be those lunches you seem to buy multiple times a week or endless coffees that only seem a small amount when you’re shelling out $3 or $4 a pop.

A couple of years ago I decided to quit coffee for good and I’ve never looked back.

I now resort to a giant box of Twinings tea bags, which I use at work each day, saving me a packet every week.

I was probably buying four coffees a week at $3 each, so on these calculations I’ve saved $624 a year.

4. PAY OFF DEBT

Regardless of whether you have good or bad debt, in most cases the ideal situation is to pay it off.

For those who have a home loan, interest rates have never been lower – many deals start with just a “2” in front.

If you can, increase your repayments so you can pay down the debt faster while rates are low.

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On a $300,000 30-year loan with a rate of 3.5 per cent, if you upped the minimum repayments of $1265 by $200 per month you would save $54,000 in interest repayments and shave three years and 11 months off the loan term.

For those with credit card debt, stop using the card and consider switching the debt to a balance-transfer interest-free deal.

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@sophieelsworth

Originally published as Simple strategies that could help you save a small fortune