Advice on a savings plan from the pros

As people return to work and get back into the swing of things we’ve seen quite a few tweets about goals like saving for a holiday or just building a nice big fat savings account for a rainy day. So this seemed like a great opportunity to revisit different tips for saving money. Guest writer Nigel Bowen shares a few pointers from people in the know:

Whether you’re just getting into the habit of saving or you have a black belt in frugality, there are always new tricks to step up your savings plan.

The RaboDirect Savings and Debt Barometer 2012 showed that 20 per cent of consumers say they don’t have any savings to live off if they lost their job, a further 26 per cent say they have savings that would last less than a month. Given these numbers, it sounds like we could all use a few savings tips from the pros.

1. Pay yourself first

This is something financial gurus, such as Rich Dad, Poor Dad‘s Robert Kiyosaki, make a big deal of because, somewhat counterintuitively, it works. Most people get their salary, pay their outstanding bills, put aside some money for expenses and only then allocate leftover money to savings. And guess what? There’s often no or little money left by that point.

If you want to make your savings plan work, you need to treat putting money into your savings account as being as urgent and important as paying the electricity company to make sure your power isn’t disconnected.

2. Sell to save

David Koch advises savers sell anything they haven’t touched in six to eight months. Have a look around your home and find anything you’re no longer using. If it’s of worth, take to eBay, Gumtree or even your own social media pages to start selling and put all the proceeds towards paying off debt or saving.

3. Drink the latte

Most financial advisors would suggest you quit buying your latte each morning at work to save up to $30 every week but Scott Pape, better known as The Barefoot Investor, is a little more realistic. He says you should have your coffee and drink it too – just factor the cost into your weekly budget so you’re prepared.

4. Stop paying for unused subscriptions

With gym memberships costing upwards of $70 a month, Ross Greenwood advises that if you’re not attending regularly you’re simply wasting your money. If you are a regular gym goer, by all means keep the gym membership but think about ditching that magazine subscription for the monthly publication you barely browse. Do the maths, set your priorities and work out what’s really worth your money.

5. Review your accounts

Spending just 10 minutes each week reviewing all your transactions will help you get on top of your goals, says David Koch. These reviews will help you identify where you could cut back on spending – like the aforementioned subscriptions, perhaps. This will also help you catch any credit card fraud or wrong transactions quickly.

Koch also advises a more thorough review be conducted monthly to help you meet your goals, review your budget and ensure your bills are paid. And if you discover you’ve missed a bill, rather than putting it on credit, call the institution and let them know an expected payment date. It only takes a few unique changes to your spending and savings habits to begin to see a real change in your accumulating funds.