I am sharing my personal top 6 ways of cutting spending without cutting lifestyle so you can make your money go further.

I know you are just like me and love to enjoy a beautiful lifestyle! When you work as hard as we do, whether that’s in paid employment and/or running a household, nobody wants to just live to work. 

I have had people say to me ‘oh you are so lucky that you get to go on so many holidays’… I promise you that luck has nothing to do with it (spoiler alert – if you also do top tip #1, you will be well on your way to enjoying what you love most too).

Starting at number 6 and working my way through to my absolute #1, here goes:

6. Health Insurance. Be sure to do your numbers. A few years ago I got fed up with paying health insurance. I was so disillusioned with the whole scheme but when I did the numbers, I realised it was still better for me than paying the Medicare Levy Surcharge for not having private health.

What is more, during that process I contacted my health insurer and let them know I was looking for lower insurance costs and considering shopping around. They offered me a significant change in my health fund – it turned out I was paying for all sorts of things that I didn’t need plus they had a loyalty discount. I ended up paying about half of the premium I was.

I also learned during that time that each year I can ask for my health fund to be suspended, which is great as I am overseas a lot and I cant claim when overseas.

I have since saved approx. $1,820 per year. Easy money for one phone call.

5. Call your bank. If you have bank accounts with monthly fees, have credit cards or a mortgage, you will be surprised how receptive your bank will be to lowering these fees and rates if you call and ask.

With respect to mortgage interest – you should be phoning your bank every 6 months and asking for a reduction. If your bank will not reduce any further, speak to the mortgage broker (preferably the one who got you the loan if you were happy with them) about the benefits of refinancing in your situation.

It is important to be prepared though. Do a quick google search on comparison mortgages, rates, cards etc so when you ask you can given an example of what other banks are offering and your expectation for yours.

I have saved over $2000 on my mortgage just this year. Easy money for one quick phonecall.

4. Fuel. For the savvy savers in my Finance for Mummies Facebook Group you already have the heads up on this one. So, for everyone who also wants to be a savvy saver – here is one of my favourite money saving apps. It is called ‘Petrol Spy.’ Petrol Spy can be installed to your smartphone free from Google Play or Apple Store.

When you open the app you can select the fuel for your car and your location. The app will show you the advertised price of fuel at the retailers in your area. If you are planning ahead on your journey. you can look to other suburbs and locations.

Another handy fuel app is the 7-11 app. It has a fuel price lock feature. When the price of fuel is low at a 7-11 but your tank is full, you can lock in the low price of fuel and it is valid for 7 days at any other 7-11 fuel station.

If, like me, you average a savings of $11 per week, that is a saving of $572 per year right in your pocket. Easy money for downloading a free app,

3. Subscription services. There are two types of subscription traps – the first one is where you unwittingly sign up for an ongoing service when you thought you only made a one-off purchase or were receiving something for free, the second is the marketing behind subscription services – they are designed to appear cheaper but in the hopes that you actually forget about the subscription and continue paying whether you use the service or not.

Of course, not all businesses operate this way and some genuinely want to make their services affordable for you, but you must be aware of which is which. Only pay for what you use.

The easiest version of this I can think of when paying for what you use is services like Stan and Netflix – there are no lock in contracts, and you can re-start at any time. So, when you are having down time, going away, under pressure at work, house-sitting elsewhere etc – turn your service off or pause the service. You can save easy money here.

Think of your top five subscription services, write down the cost and then assume you don’t need it 3 times per year. For me it would look like Spotify, Audible, Netflix and Canva – well Netflix I share with a family member so I already pay nothing and the others add up to $46.85 per month. By pausing these services 3 months of the year when I am too occupied elsewhere to use them I can save $140.55. Or just pause them to save money toward your credit debt for now.

Easy $140.55 in my pocket each year without missing a thing!

2. Credit and Store Cards (After Pay, Zip Pay) – When I was 18 I got my first credit card and I maxed it out that same week. I got a second credit card and I was a little better and didn’t max that out but the damage was already done. I couldn’t keep up with the repayments on either. I simply didn’t make enough money at the time to be spending more than I had. I could not buy something AND pay interest on it.

What become SUPER obvious was that I could not afford to buy something with interest AND compound interest AND late fees. I was so fortunate that I learned how to negotiate a payment plan AND have the late payments removed from my credit rating. I didn’t get another credit card after that for at least 10 years and the only reason I did is because international travel is quite problematic without one.

Anything from hiring cars to hotel payments – not to mention, the right card gives me free travel insurance (saves me $00’s per year). BUT I had learned my lesson and I know how to use a credit card to my advantage. I feel sorry for the banks now – they simply make no money from me whatsoever on this product!

If you have credit card debt – look at your statement to find out how much interest you are paying each month. You will quickly realise that by getting rid of that debt, you can free up that money each month to go toward other expenses or to improve your savings. The best part will be freeing yourself of the stress of the ever increasing balance.

I can hear you say ‘but you promised we didn’t have to compromise lifestyle...’ – that is true. I am letting you know that in no uncertain terms, the ONLY acceptable lifestyle for you is the one that you can afford without  credit card debt and by living within your means. Everything else is not your lifestyle – it is what the banks want you to do so they can earn money from you.

Ever wondered how the rich get richer and the poor get poorer? Credit card debt is one of those ways. Sometimes things come up in life and you end up with credit card debt that you know is not good and you know you do not want. You are not alone. It happens to many, many people.

But when that happens, here is what you MUST do to fix it. You MUST find a way to pay it down as soon as possible. Have you ever heard of the Barefoot Investor or Dave Ramsey? They will tell you the same thing that I am. Your number 1 financial goal is to have $0 credit card debt.

Here is how to deal with it: List the amount owing on each of your credit cards and then next to the relevant card, write the applicable interest rate. Start by paying down the smallest debt (or I prefer that you pay down the one with the highest interest).

Paying down the smallest debt first is called The Debt Snowball method, which was popularised by Dave Ramsey. The idea is quite simple, start making extra payments on your smallest debt to get rid of it, then apply that same payment to the second small debt, and so on. You might ask where to get the money from to get started – you must find it anywhere you can – look at all of the suggestions in this list to free up funds. Look at what you have at home that you can sell. Call in debts that are owed to you. Work overtime if it is possible. Take a temporary second job. Start doing paid surveys. Do the $21 Challenge. Run a market stall. Sell cans of drink and snacks at work. Ask for money for your birthday and Christmas rather than gifts. If you pre-pay any utilities, hold off on advance payments. Delay travel, hair/beauty, clothing etc.

The important thing is to know your total owing balance, the interest you are being charged and make a plan to get the funds to pay off the balance as quickly as possible. Once that is done, all that money will be in your hand to use for the lifestyle you love.

This one is not as easy but it is impactful and well worth it. The freedom you will feel when you owe $0 on your credit card will be worth every bit of your energy.

So there are my 5 ways to cut spending without cutting your lifestyle or missing out. But without my #1 way... all of that might seem a little less relevant to you. My #1 way to cut spending without cutting lifestyle is not a savings hack. My #1 way to cut spending without cutting lifestyle is much better....

and here it is:

1. I KNOW WHAT I WANT and I make a plan to make it happen. This is how I cut spending without cutting my lifestyle. I see beautiful and exciting things everyday… I am no stranger to lingering a little longer online shopping or getting caught up with a new travel idea. I love a pretty boutique and things that smell amazing. I love jewellery and I love clothes... and a killer stiletto is my true love... BUT I remind myself of what I really want and while I can admire all these things I do not let myself get drawn so far in that it costs me what I really want.

Even if I have to shift the goal posts because of changes in my taste, environment or lifestyle patterns, none of my lifestyle is by accident. The life I live today is a culmination of years of planning what I want my life to look like and making sure that my finances match that.

As much as we hate to think it, money really does impact everything we do – there is nothing in our lives that is untouched by money. It has the potential to be a friend or a foe. It can take us where we most desire and where we least desire.

I know that if I were to get everything that my eye desired, I would have a lot of things but what I love most in life is experiences. So, I forego the things that will distract me from achieving what I really want. Besides, I only have one set of feet, so how many stiletto's does a girl really need?! I certainly can't wear them swimming in the mediterranean sea or at the top of Table Mountain.

Years ago I was deeply impacted by something written my Max Lucado in one of his books. He said “Big Dream or no Dream, it will cost you your whole life”. I think about that all the time and I think about it in the context of the lifestyle I want to live and how I plan, how I spend.

Some people don’t want to dream big or plan because they might get disappointed or fail but that is a sure way to be disappointed. Decide what you want your lifestyle to look like, write it down, make a plan to achieve it. You can do it!

It really is the easiest way to cut spending because you know what you really want most

Conclusion

It is absolutely possible to cut spending without cutting lifestyle but more so, being certain of the life and lifestyle you want will help focus your spending on the things you really want in life.

So, what will it feel like for you to be living the life you really want and what will you do with all the money you have saved?

Want to see more ways that I save? Go to Part 2 of this blog https://www.thehouseofjordan.com.au/blog/4-more-ways-to-cut-spending-without-cutting-lifestyle

Send me an email [email protected] and let me know how much you have saved.

Already made your way through this list and looking for more ways to save? Check out our Facebook group Finance for Mummies https://www.facebook.com/groups/financeformummies

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