11 Small Things You Can Do to Improve Your Saving Habit

Need to start saving for a holiday, a big ticket item or maybe even a deposit for your first home? The hardest part of saving can be knowing where to start, especially when you find your bank balance dreadfully low at the end of every pay cycle.

Whatever your income, you can start and sustain a strong saving habit. Building saving habits now will help you to achieve your goals in the short term, as well as help you to plan for a positive and financially secure future!

Here are eleven practical things you can do to improve your saving habit and reach your goals.


1. Write down your goal

The best place to start is to make your savings goal concrete by writing it down. The simple act of writing down your goal/s will get you in the right mindset to start saving. With your goal in front of you, you can start to focus on the weekly and monthly savings goals you will need to commit to in order to achieve the ‘prize’.

Write down a plan for how much you will need to save each week and month to achieve your goal in the time you have allocated.


2. Track your spending for a week

When was the last time you took a good look at your day-to-day spending habits? Getting an accurate picture of how you are spending your money will help you to see where you can save a little extra each week. According to the ASIC MoneySmart website, most of us think it’s our spending on big ticket items that hits our wallets, but it’s often the daily little things that cost us more!

You can manually track each purchase for one week in a notepad or in a note on your mobile phone. Your rent or mortgage payments, your morning coffee, your personal purchases, your weekly grocery shop (including any cheeky ‘snack runs’), lunches and dinners out…record everything! Alternatively, you can use your credit card or bank statements to help you with this, but be sure to keep track of any cash purchases in this timeframe. You can also use the MoneySmart app to track your expenses.

Once your week of tracking is complete, total up how much you spent on each category, for example transport, fuel, eating out, groceries, retail therapy etc. When you assess these totals you can start to make some decisions about where you may be able to cut back.


3. Make a budget

Now that you can see what you typically spend in a week, you can start to put your expenses into a budget. Once you total all your expenses and track these against your income, you can begin planning your spending and avoid overspending. Remember to include larger expenses which will come up regularly, though not every month, such as car maintenance.

Your budget will help you ensure you are not spending more than you earn and will help you to see where you may be able to save a little more.


4. Separate your savings and giving

Giving and savings should be our first priorities, however, when we are not intentional these will often be left to last.

Assume that if you can see your money, you will spend it. Set up a savings account to keep your savings and giving separate from your regular transaction account. You’ll restrict access to your money and get a higher interest rate than your average transaction account.

Automate your saving by setting up automatic transfers into your savings account after your regular pay-day. You can also put any additional income away in your savings account, such as your tax refund, or money from overtime or odd jobs you may pick up.


5. Cut back on discretionary spending

Now that you’ve reviewed your weekly spending habits and created a budget, you can determine which expenses you can comfortably live without. If you have multiple coffees each day, try cutting back to just one or even making your coffee at home or at the office. If your ‘eating out’ expenses are much higher than you expected, commit to packing your lunch for work. Planning your meals for the week can save loads of wastage from your weekly grocery shop.
Another way to save some extra dollars is to review your memberships, subscription plans or the like. Are there any subscription services that you don’t use much anymore? Consider pausing or canceling these to save a little extra every month. Be sure to add the savings you make from cutting your discretionary spending to your automatic transfer into your savings account.


6. Build some emergency savings

Life happens! Which means that from time to time something unexpected (and usually costly) will happen. You know those moments, when the school excursion request comes right when the electricity bill is due; or when the car breaks down right in the middle of your church’s missions month.

The idea of having emergency savings is to remove the stress when ‘life happens’. We encourage people to build an emergency fund of about $2,000. We would also say that generally, building an emergency fund should take priority over making extra repayments on debt (so that you can avoid the debt trap next time around).

And if ‘life happens’ before you have been able to build a full emergency fund, don’t stress. While we generally discourage the use of credit cards, having even a little extra tucked away ahead of an unexpected necessary purchase can help you to save money on interest if you are required to put some of the purchase on to your credit card or store credit.


7. Sell something

We have already outlined one of the best ways to start building some savings is by cutting back on discretionary spending. The other small thing you can do to give yourself a start on your emergency savings is to sell some stuff. While we have not looked into the whole Marie Kondo craze, there is something liberating in having someone pay you for something that would otherwise end up in the bin in another five years time.

Sites like Facebook Marketplace, eBay and Gumtree have made it so easy to offload some of the stuff you no longer use. They can get you connected with someone in your area willing to buy your pre-loved goods and generally the buyer comes to you (saving on postage).


8. Pay down debt

Even a high interest savings account will not earn you more than the interest you may be paying on consumer debt. Credit cards and store cards in particular have very high interest rates, which will eat away at any progress you make with savings.

If you have consumer debt racking up interest, make it a priority in your budget to pay this down. Whether you can make a few lump sum repayments or steadily increase your repayments over time, the quicker you can pay back the debt, the less you’ll spend on interest and the sooner you can start seeing your savings grow.

If you choose to keep your credit cards once you’ve significantly reduced or paid off credit, make a habit of paying off your monthly balance before you’re charged interest. The key is to ensure that you are not using your credit cards and options such as AfterPay to live beyond your means. If you don’t have the cash to pay for something, consider waiting a month or two before you purchase!


9. Plan your bigger purchases

There are some bills and purchases you can’t plan for, such as an unexpected car or home repairs. There will be, however, purchases you know you’ll need to make in the coming months. These may include upgrading your personal computer, updating your workwear or your next holiday.

Getting organised early and making a plan may help you to get a better deal, for example during the typical post-holiday or end of financial year sales.


10. Avoid temptation

Do you find yourself aimlessly wandering around the shopping centre or browsing your favourite online shopping sites and then making unnecessary purchases? Perhaps you could find other ways to enjoy your leisure time that will help you to stay on track with your savings. Go for a bush walk with a friend, take your kids to a playground, read a great book or take up a new past-time like cooking a new cuisine.

Less exposure to shiny new things equals less temptation to buy. Getting rid of magazines and unsubscribing from store subscriptions and blogs can help with this too!


11. Make small adjustments

Remember that small changes can make a big difference over time. As you continue to assess your spending and your budget look for small lifestyle and mindset changes that can help to grow your savings.

Keep looking for new ways to save a little extra on your regular bills by reviewing the best deals on your utilities, insurances, phone plans, groceries and more. Even small discounts on regular bills can add a little extra cash to your savings, which all adds up over time!

Give yourself permission to start slow as you become more mindful of your spending and establish your new savings habit. And remember to stay positive and celebrate even the smallest wins!


Disclaimer: The content of this article includes advice that is general in nature and does not consider your personal situation. Christian Super encourages all people considering their options in retirement planning to seek out qualified professionals who can provide specific personal advice.