6 Tips on How to Save the Money you Earn

To help you reduce unnecessary expenses, save money, better track your cash flow, and lessen financial distress, Paytime has put together our top 6 tips on how to save the money you earn.

Review your subscriptions 

Due to the automatic weekly, monthly, or annual payment, it’s easy to lose track of how many subscriptions you have. Whilst individually each subscription may be inexpensive, cumulatively all subscriptions can add to a large sum. Say for example you pay for Netflix, Stan, Disney, Spotify, Apple Music, and YouTube Play. That’s six subscriptions in just two categories! 

Therefore, the first step to saying money is to review your subscriptions and determine which to keep, based on use, and which you can sacrifice. Pick one or two subscriptions from each category to avoid over-consumption. 

A simple technique to track subscriptions is to create an excel sheet with the charge date and dollar amount. Using an excel sheet helps you track what you’re paying for, and therefore what you can keep (what’s worth the money) and what you don’t need (what you rarely use). Make sure you add each subscription the day you make your first payment to keep track! 

Plan your food ahead of time

Food and drink is one of a human’s largest costs due to the frequency we need to eat to obtain appropriate nutrition and energy. Although this money saving technique sounds simple, we all know it can be quite difficult. Therefore you should approach your meal preparation on a weekly basis to ensure your plan is manageable and realistic. 

At the beginning of the week write down the meals you know you will eat out, for example, the days you will be at the office or the days you have breakfast, lunch, or dinner plans. Then, purchase groceries for the meals aside from those days. Consider purchasing snacks to reduce impulse consumption, such as muesli bars and fruit, and buy groceries that you like to eat to reduce the temptation to order takeaway for your meals at home. 

Another trick is to reduce the amount of drinks you purchase. Let’s take coffee for example. You will pay between $3.50-$5 for a coffee in Australia, and whilst that seems like an insignificant purchase, if you buy a coffee every day that adds to a total of $35 a week. That’s $140 a month, just on coffee! Consider purchasing instant coffee, or a coffee machine, to reduce this cost. The same concept can be applied to juice, smoothies, and tea. 

Create a budget 

Another effective but difficult money saving technique. In order to create a budget, and stick to it, you must be realistic. First, find a budget template excel sheet, such as this one, and insert your total income for the month. Then, add all the bills you know you have for the month and when they are due (ie: subscriptions, mortgage, car registration, health insurance, birthday gifts, etc). The money you have left is now what you have to plan your activities around. Be sure to add your expenses as they are incurred to have a realistic visual of your outgoings. Top tip: create a note on your phone titled “Weekly Expenses” and add each purchase as you make it. 

After a few months you can review your budget sheets and have a valuable breakdown of how much you’re saving on a monthly basis and where most of your money goes within the month. You can use this data to better plan for your next month, and therefore, increase your financial wellbeing. 

Evaluate your purchases

Instant gratification comes with impulse purchases! Take the muffin at the coffee shop, for example. You must create an evaluation strategy to reduce your impulse purchases. This can be as simple as having four questions you ask yourself before making a purchase. Here’s an example: 

  • Do I need this or do I want this? 
  • Have I made a purchase similar to this this week? 
  • Will I regret this purchase tomorrow? 
  • Is there a purchase I’d prefer to make? 

Another technique is to contemplate the decision for a consistent time period, say 30 minutes, before making any purchase. 

Use cash instead of eftpos 

Cash seems old school but is highly effective in helping you track your money. Use the budget you’ve created to determine your spending money for the week. Withdraw that amount of money in cash and use cash for your everyday purchases. The physicality of money helps you visualise how much you’ve spent and how much you have left. It also helps you question your impulse decisions – it’s a bigger decision to hand over notes and coins than to tap your phone or card! 

On-demand pay 

From the budget sheet you’ve created in excel, you’ll notice your outgoings (bills) in some months may be significantly higher than outgoings in other months. As your income may not differ on a monthly basis, this results in less spending money in some months – which can lead to financial distress. 

To help you better manage your finances, you can request that your employer provides you with the opportunity to access the wage you’ve earned based on the hours you’ve worked. This is part of a company’s employee benefits program and is called Earned Wage Access (EWA) or On-demand Pay. 

By adopting on-demand pay, you have a never-ending pool of cash flow you can utilize. This puts the power back in your hands, as an employee, and enables you to pay bills whilst not reducing spending money. Instead of waiting for a weekly, fortnightly, or monthly payday, you can disperse your income as you need it. 

If you’re an employee and would like to learn more about PayTime’s on-demand pay capability, click here. Alternatively, if you’re an employer looking to adopt earned wage access, click here

Click here to find out more about Earned Wage Access as an employee, or click here for an information page to send to your employer.