When a new year arrives, it’s a great time for people to turn over a new leaf by either kicking out an old habit or perhaps starting a new hobby. Time and time again though, we as humans have a knack for breaking our promises to ourselves simply due to a lack of determination. However, what if you knew that by sticking to your NYE resolution you could save enough money for to pay for a holiday each year. Would that get you motivated?
This is likely to turn the table for many, giving that goal a tangible and highly motivational outcome. New Years resolutions are easier to break if they do not have an incentive, which is exactly why the following top money saving goals are the ideal place to start if you're looking to grow your bank balance during 2016.
Yes, I know, it’s something that all smokers tell their friends on New Years Eve and if you are like me, you probably rarely believe them. As bored as we are of hearing about it, stopping smoking can unleash a huge amount of tied up cash, which this unhealthy habit is akin with. Plus, stopping is also very likely to add years to your life in the process.
Let's take for example a packet of Winfield 25s, which in 2015 cost around $21.40 per pack. If a smoker consumed one packet per day for 7 days of the week, by the end of the month they would have spent over $600. During the course of one year, the same number of cigarettes per month would mean a total cost of around $7,700.
Remember, this $7,700 doesn’t include any additional costs that you may spend on associated products like air fresheners, insurance premiums, teeth whitening etc. To put this into perspective, that amount of money is enough to take three people on an all-inclusive $2,319 per person holiday to Shangri-La´s Tanjung Aru Resort in Malaysia for 10 nights, including return flights.
Beginning to do regular exercise doesn’t sound like it will help you save money, but it actually does. Experts recommend that even 20 minutes of exercise each day will encourage people to eat more healthily which as a result, reduces their exposure to illness. Eating and living well produces a healthy body and a stronger immune system.
A Medibank report suggests that as people begin to eat and live more healthier, their need for prescription drugs and medical costs decrease in general across all ages. Dieticians around the world have seen a strong correlation between exercise and the improvement of conditions such as diabetes, high blood pressure, high cholesterol and heart disease. Certain specialists have seen their patients drastically reduce, sometimes by up to 50%, their dependency on medication when exercising; some of which stopping all form of supportive drugs completely.
Now you must be thinking that eating healthy obviously comes with its associated costs. Raw meats, cooking time, and extra ingredients for seasoning all sound like extra costs compared to simply buying a frozen or takeaway pizza, right?
Take for example the cost of a 1kg bag of fries at Woolworths though, which would cost $2.69. Compare this to a 2kg bag of Ruby Lou washed potatoes costing $3.50 ($1.75 per kg) where not only are you getting double the quantity, but there's also no added salt, preservatives or colourings, and they're richer in vitamins and fibre. You also have a wider variety of ways to serve them (e.g. mashed, baked, boiled etc).
Buying healthy is all about buying fresh while produce is in season and it's not difficult for healthy eating to cost far less compared to easy convenience food found at the supermarket (e.g frozen meals).
A great saying that defines the way I look at food is; “You don’t focus on what’s the cheapest, you focus on what’s going to meet your needs most economically.”
Pay Off Debt
If you have already recognised that you need to pay off your debt this year, then that’s an excellent step in the right direction. The sooner you relieve yourself of debt the faster you can begin enjoying your money without something (or someone) hanging over you.
The average credit card holder in Australia owes roughly $4,363 in debt, which loosely costs them somewhere in the region of $700 per year if their interest lies between 15 - 20%. The Australian government states on their website that if you have $4,400 in credit card debt and only opt to make the minimum repayments, it will take you 31 years to pay back the debt and cost you $14,900 in interest. If you choose to pay off $216 per month, you can clear your debt in 2 years and save yourself $9,700 in interest payments. I think you can see where I'm going with this. Start now and pay off as much as possible each month.
I’ve covered this topic numerous times in the past, but it wouldn’t be right not to mention it again in this post as well. We all had financial problems at one time or another and there is no greater relief than having spare cash to save the day when they occur. But, how can storing spare cash save you money if you are having to spend it to get yourself out of the situation in the first place?
It’s quite simple; if you ever need to use money in an emergency, having readily available spare cash prevents you from needing to turn to high-APR credit cards, short-term loans or payday loan alternatives.
For example, if you get struck with a $500 car repair and borrow the money on a credit card at a rate of 15.99% APR, that emergency $500 will actually cost you $580 in minimum repayments.
A payday loan might charge you 15% every fortnight, which over a year will amount to 400% APR. Don’t pay the company back within a month and that $500 will cost you $150 just for borrowing money for 30 days.
So let me end off by wishing you all a happy new year and I hope that these tips will help you open your own eyes, or perhaps those of a friend, to the benefits of saving money as well as the wide variety of ways to easily do so during our daily lives.