How to be an Effective Saver

We all want to be super savers, but how do you get “good” at saving? Practise is a big part of it, you can’t help but get better at what you do often. Until the savings habit becomes a deep ingrained part of your psyche I thought I’d help you out by sharing some of the strategies I’ve used over the years to help me be a better saver. They’ve worked well for me but everyone has a different savings mojo.

Computers are our friends, let them do the work for you.

Automate – We already have so much to think about so make life easier on yourself and automate your savings. Have a portion of your paycheque go straight into your savings account. There’s no chance that you’ll forget some weeks and it won’t become a chore you have to remember to do every time you get paid.

Why are you even saving?

Save with purpose – Set savings goals, you might need an emergency fund, long term savings for retirement an short term savings for big ticket items, house deposit or a holiday. Keep emergency funds and long term savings separate. Savings for retirement need to grow so never dip into that stash of money. And how about taking it a level deeper, yes retiring early and establishing an emergency fund are excellent reasons for saving. But why do you really want an emergency fund? Why do you want to retire early. Take some time to think over the kind of financial situation you want for yourself and why.

You are your own worst enemy

Keep those dollars at arms length – If a nice fat bank balance is too tempting for you then open a savings account that is a bit trickier to access. Try another bank or an online only account. You don’t want to be able to flick money over to spend instantly when you are faced with temptation. If it takes a day to transfer over hopefully that will dissuade you from some impulse purchases! Don’t link the account to any cards.

 Bank your windfalls

Add pay rises to your automated savings – you won’t miss what you’ve never had. So don’t let pay increases lead to lifestyle inflation. Instead up the automated savings amount to match the pay increase.


Grow cash GROW!

Money’s got to have a job, no lazy money! – Once you’ve built up some savings put those dollars to work. Don’t leave tempting piles of cash around as you might start to feel those dollar burning a hole in your pocket. A huge balance might make you feel wealthier but you can’t spend those dollars just yet, you need to grow them even more! Invest the cash into income producing assets, shares, index funds, property, bonds etc.

Squeeze out a few more dollars, you can do it!

Save everyday – Did you skip buying your lunch, did you negotiate a discount on a regular bill? Transfer those day to day savings out of your transaction account and into your savings as you go. Not only do you get the great feeling of scoring a deal your savings balance goes up as well. Twice the rewards!

Saving gets easier the more you practise, but one final thought. Saving can also become exhausting. A little mad money for guilt free splurges will help keep you sane and keep your savings on track. Good luck!


August Expenses – Prepaying a Future Holiday and Eating all the Foods!

At the end of month I started to feel like my spending wasn’t really in line with what I wanted for myself. I slipped back into buying a lot of lunches and drinking in bars on weekends. Living large baby! I was also putting some of these purchases on the credit card and come pay day I was transferring way more than I was comfortable with to get the credit card balance back to zero. Time to be real with myself. I cannot afford to live like that and have the financial secure future I imagine.

There is $500 of easy money that could have gone into investments this month. Instead it mostly went in my mouth. (It was all delicious stuff to be honest). Between that and the grocery bill I do believe I can find an extra $600 next month to go into savings. It’s hard being focused all the time and its easy to just slip into the buy “whatever you think you need in the moment” mindset. With a little more thoughtfulness I’m sure I can do better.

I spent a lot on Fuel last month but I still have 3/4 tank as I’ve been catching the bus a few days a week.

I prepaid a trip to Nelson for the New Zealand Homebrewers conference in March next year. Even using airBnB accommodation costs are so high! Still it was 30% cheaper than a motel.

Still throwing money at the rental property to pay for a $2,400 heating unit.

And my last thought is thank fark I earn a decent wage and my extravagant spending habits don’t get me into trouble.  I often worry that New Zealand is becoming a low wage economy and I see lots of big corporations paying their workers very low wages, not even a living wage. They all do it and slowly but surely they are eroding the middle class and therefore their own consumer base. Companies want their workers poor and their customers rich, well guess what, your customers are your workers.

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Oh sweet July, thank you for my tax return which allowed me to pay $4000 off my mortgage in one hit. BEST FEELING EVER.  It was a one off so not accounted for in these totals.

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Everyday expenses, are a little up this month since I was trying to remain in holiday mode (futile). Being back in winter and at work is all too bleak so I treated myself to some things. After about 3 years of buying bugger all clothing I splurged again this month on a couple of jackets, a winter and summer weight one both nice enough for work as well. As for the Household goods category, I replaced a duvet inner that had to be over 20 years old and was starting to fall apart. I bought a space heater for the teens room downstairs as its been pretty cold (ah I’m so nice. She has her very first job interview tomorrow). Car registration was due (annual car tax I guess for those non NZ’ers) it includes medical cover in the case of an accident and road maintenance .

So the odd transport cost because I caught an Uber home from my bosses 65th birthday. Spending money this month was contributing for a gift for previously mentioned boss. (She is awesome, she built her own house!). A movie date with my husband and loads of craft beers. Anyway I feel pretty spendy this month. I am trying to throw some money into my investment properties so I can get some improvements done. The Hamilton property needs heating installed which is planned for next month.

Utilities – I got a bit ahead on the power bill, so I didn’t have to pay much this month.

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As you can see I don’t exactly fall into the frugal category when it comes to spending. Sometimes I struggle with that and beat myself up over it. Other times I really need that little luxury in my life and no guilt over dinner out.  I’m sure it would be a different story if we had consumer debt or student loans to worry about, but thankfully we only have the mortgage to worry about.

January 2016 Expenses and Investments

This has been my first month using ‘You Need a Budget’ or YNAB software.

Before I just used the system of paying myself first, so essentially I saved what I thought was a reasonable amount and then I spent what was left over. I never really had a handle on my actual expenses. Hopefully YNAB will give me a better understanding of my spending habits and hopefully I can start to increase my savings. YNAB claims most users save an extra $200 a month when they use the software

To explain my budget a little – I pay most the bills and my partner gives me money each month for their share of the bills e.g groceries, mortgage and insurance.

So here is the nice little graph that YNAB generates. Keep in mind everything is in New Zealand dollars. (The link will give you some idea of the purchasing power of a NZ$ for those who are curious).

Jan 16 YNAB

Ooooooo pretty colours. I love graphs!

As you can see most of our spending is on the mortgage. Holiday spending was paying for a trip I am taking in March, I booked the accommodation now. I didn’t take it out of my vacation savings instead I just absorbed it into this months spending. Below is a more detailed break down.

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Saving and investing: $1,153 saved or invested for the month. Not bad! I’m also saving some spending money for an upcoming vacation.

Groceries: This is really high! However it’s for 2 people and we just started a “healthy” eating plan so while I was getting my head around all the different meals I think I spent way more than I needed to. I also pre-loaded a grocery credit card for spending in December (I get a 6% return on the money loaded onto this specific card during Jan and Feb).

Spending Money and Restaurants: So summer time vibes and “holiday” mode may have lead to a few extra treats. I do like to go out for meals occasionally with my partner but by being a bit more creative I think I can cut these categories down. The spending money went on some hairdressing scissors (worth it!) and a fancy bottle of wine (not worth it, sad face, lesson learned) plus a book and a lotto ticket (Argh curse you lotto, the tax on those bad at math, but its our combined workplace lotto ticket, I don’t want those bastards winning without me!)

Clothing: For $90.50 I got 2 pairs of shoes, 4 tops and a pair of shorts and jeans. Clearance sales for the win!

Household goods: A multifunction stick blender (heavily discounted $100 off!), bathroom organiser and air tight container for dry goods.

I don’t generally carry a credit card balance but YNAB seems to take your starting credit card balance as a debt that needs to be repaid.

Goals for next month: Increase savings, reduce grocery spending. Also I’m thinking of starting a sinking fund for house repairs and maintenance. How does everyone budget for this? Currently I would take the funds out of our general savings.

Also I may have to start paying a little extra into our property investment fund next month as I want to pay down the mortgages on those little faster and build up a buffer for any renovations and repairs.

What are your budget goals for the next month?