It was January 2016 when I landed my first full time job after graduating from university. I remember the day so vividly. Goosebumps swarming my body, full of excitement. I was finally entering into adulthood, and no longer a poor university student.
It wasn’t long until that fantasy came crashing down, hard. Who knew being an adult and living out of home was so damn expensive. After rent, electricity, gas, water, internet, phone, food, fuel, car insurance and gym bills I barely had a cent to my name!
Fast forward a few years, and after several promotions and salary increases I was now earning double what I started as a graduate however I found myself in a difficult situation. I was putting money into my savings account but I was also tapping into that money for “emergencies”, so where was it all going?
3 Piggy Bank Concept
At the age of 18 I remember my mother having a stern talk with me about my money management. She wrote down a budget on a napkin, outlining each item of expense which is to be taken as a priority and then looking at the money I had left over, which was to be allocated into three different bank accounts:
- Long term saving (eg. house)
- Short term saving (eg. holiday)
- Every day expenses
So at the age of 25 I revisited this exercise and wrote down all of my expenses (in an excel spreadsheet this time), analysing my bank statements to better understand my monthly expenses. I was gobsmacked with the results and couldn’t believe:
- How careless I was being with my money
- How much I was paying for bills
9 ways to reduce my monthly expenses
So the research began to identify how to reduce my monthly expenses. I came to the conclusion the only way I could get back on track, and stop tapping into my long-term savings was to implement the following:
1. Turn off all electric power points
In Australia you have an On / Off switch for your electric power points. If the appliance is switched off but the power point is on, you’re still consuming energy.
Since turning off the electric power points my energy bill has reduced by $30 a month!
2. Check light bulbs
In Australia on average 5% of your bill is dedicated to lighting. Doesn’t seem like a lot but when your electricity bill is $150 a month, 5% equates to $7.50, which is $90 a year.
Switching to energy-efficient lighting is one of the fastest ways to reduce your energy bills. We are very lucky to live in this day and age where we have so many options to choose from. I personally use halogen incandescent, CFL, or LED light bulbs.
3. Wash my clothes using cold wash
Did you know about 90% of the energy a washing machine uses relates to heating the water?
Washing with cold water saves energy, saves your clothes and reduces your carbon emissions. And if you’re worried that cold washing doesn’t remove stains, it does, I have tested it.
4. Review your Energy & Utility providers
Take the time to research and choose an energy utility that is right for you. When you call your current energy provider to negotiate, make sure you have done your homework. Be armed with information about other deals that are available, and make your energy provider believe you’re going to leave. You’ll be amazed what they can do.
5. Review your Insurance policies and providers
Wow, okay this is something you need to check, every single year. I was seriously getting ripped off!
PLUS my car insurance company thought I was still living in the Gold Coast, which means my premium was more expensive than it should be.
6. Cancel subscriptions that no longer serve you
I have wasted so much money on Apps that I rarely use, and subscriptions like Netflix that distract me from doing the things I love, like reading, or writing and producing content for FIIT Collective.
I did a massive clean up and cancelled a number of subscriptions that saved me over $600 a year!
7. Stop buying coffee
I was buying a minimum of 1 coffee a day, sometimes 2. At $4.00 a coffee, that’s $1,456 a YEAR, minimum (based on 1 coffee alone).
That doesn’t mean I have stopped drinking coffee. I just drink the coffee at work, and only treat myself to barista coffee on special occasions.
8. Only eat out on special occasions
I was surprised how much money I spent on eating out. Whenever I was catching up with friends, or when my partner or parents came to Melbourne, I would go out for breakfast, lunch or dinner. I was eating out most weeks.
I decided to substitute going out to eat, with cooking at home, or getting my friends to bring a plate to contribute to dinner, which has helped a lot. I still love eating out but I am more selective about how often I do.
9. Reduce credit card spend
I always swore to myself I would never get a credit card. Moving into my second job, I decided it was necessary, for two reasons:
- I took a pay cut to pursue my dream job at the time
- I wanted a good credit rating to help when I purchase my first home
Before I knew it, I was hooked. I was using my credit card for every single purchase to increase the frequent flyer points I was earning. A year in, and I decided enough was enough, and the credit card is ONLY for emergencies or gifts.
Since then I have been more conscious and aware of the “actual” money I had in my everyday bank account, which means I was more strategic about any credit card purchases.
When you look at each item in isolation you may think it’s not saving that much, however when you add all the savings together, it can add-up to thousands of dollars each year.
I am now more conscious about how I spend my money, and constantly looking at new ways to save. If you have any recommendations, please share them in the comment box below.