How to avoid the trap of living pay-by-pay

For some it seems that as soon as we receive our pay it isn’t long before we see our bank balance rapidly decline and we can’t wait for our next payday to come. But if you look at where your money goes and what you can cut back on, you may be surprised. And what’s more, it’s simple and will help you reach your savings goal sooner.

1. Lunch money: save $2000 per year
Buying your lunch plus a drink each day can cost you at least $10 each time, costing you approximately $50 a week and over $2600 a year. To make a dramatic difference to your savings, start bringing your lunch from home. There are a few options including leftovers, or buy the ingredients for a week’s worth of lunch like bread, tuna or cold meat, some salad and away you go. This would cost about $15 a week. Then why not reward yourself by buying lunch once a week or fortnightky.

2. Caffeine hit: save $650 per year
The average coffee costs around $2.80, so buying one every day equates to $14 per week, over $56 a month or $672 a year! You can save your latte money by investing in a cappuccino machine, that way you have an endless supply of coffee at home anytime you like. Or why not have a coffee once you get to work for free in your office kitchen? Or if you don’t like instant, switch to tea and benefit from all those extra antioxidants.

3. Kick the cigarette habit: save $1040 per year
With the cost of cigarettes skyrocketing in recent years, many smokers will be forking out $20 per packet. If you smoke a pack per week, that’s $1040 a year you could save if you quit. Heavy smokers who smoke three packets a week will save around $60 a week, which is $3120 a year – equivalent to a great overseas holiday. Not only will you feel healthier but you will save a load of money.

4. Think before you buy: save $595 per year
Each year Australian households throw out over $5 billion worth of food, according to a report by the Australian Institute. That’s about $595 per year per household down the drain. Before you head to the shops, make a list of what you need so you can avoid buying things you don’t. Another way to save is if by making use of all your food items before you throw them away.

5. Late fees: save $364 per year
Make sure you pay all bills before the due date to avoid being whacked with a late fee. A major culprit for late fees are video shops, which can cost you $7 per DVD so if you’re late once a week, that’s $364 per year alone.

If you don’t smoke, you could save yourself $3609 per year and for a heavy smoker who saved on all of the above and quit, you could find yourself more than $6700 richer after one year. And with great value online savings account currently on the market, depositing $550 per month in one of the top accounts such as ING Direct‘s Savings Maximiser at 6.1 percent for 4 months or UBank‘s USaver at 6.11 percent ongoing (when you deposit $200 per month), you could top up your savings even more quickly! So make sure you compare savings accounts online to make sure all your hard savings work really pays off.

Compare savings accounts