Does talk of saving fill you with dread at the idea of complicated spreadsheets, possible house arrest and bland budget meals at home? It shouldn’t, because adopting a savings plan is simple – and you don’t have to sacrifice your lifestyle to do so.
The starting point for anything related to money is to do a budget. When it comes to saving, having a budget will help you identify how much your lifestyle is costing you, what you can do without and how much you can stash away as part of your savings plan.
“Budget templates are readily available online so it’s easy to start,” says financial adviser Deborah Kent, owner of Integra Financial Services.
“You need to factor in all your costs, including unforeseen costs such as chemist bills, which are the things we usually forget about. To ensure you’re not sacrificing your lifestyle, write down all the things that are important to you, and include them in the budget.”
If weekends away or a yearly overseas trip are luxuries you cannot live without, add the estimated cost to your budget as part of your expected costs. The surplus after all your costs are covered is what can be funneled into your savings.
“Set up a savings plan where you directly debit that amount into a high-interest savings account or a managed fund – something that is not easily accessible,” Kent advises.
Set a goal
Setting a financial goal is the key ingredient of any regular savings plan, according to Kent. “You need a goal as to what you are saving for,” she says, “whether it’s a house, a holiday or a car. It gives you a visual goal and you have a purpose behind the saving – this makes it easier to save.”
Having a savings goal also helps you determine how much you need to save on a monthly basis to achieve that goal.
“It all comes down to discipline,” adds Kent. “If you get the budget right, you will achieve your goal. Once you do it, it becomes easier to save and develop a savings habit.”
Live it up and save
There are smart tricks to saving money while maintaining an easygoing lifestyle, according to Kent. “If you enjoy going out to eat, switch dinner for breakfast – it’s cheaper but you can still enjoy the latest cafes and restaurants,” she says. “Or opt for cheaper restaurants with BYO wine, which will cut the bill significantly.”
Kent also recommends rethinking your alcohol expenditure completely. “Look at how you spend money on alcohol, as this can be very expensive. Sign up to a wine club and buy in bulk to save a lot of money.”
Other tricks include cutting down on daily takeaway lunches and coffee, bulk shopping (for example, at Costco) and recruiting friends to partake in rotating dinner parties instead of extravagant nights out.
“At the end of day, you’ll make sacrifices but you’ll be able to get back to doing the things you value most once your financial goals are met,” Kent says.