Saving money can seem like a really difficult thing to do – you only have a limited amount of money and endless things you could do with it. And then there’s all the things you have to pay for regularly, like phone bills or clothing, making it hard to save — but it’s not impossible.

One of the first things you can do to get on track to saving is make a budget, this will help you to figure out your ‘surplus income’ which basically means, how much money you have left over after you pay for everything you need.

Writing it down is one thing, but learning how to save (or be good at it!) is something else altogether.

How do I budget?

Budgeting is all about knowing your income and being aware of how you spend it. It is good to set yourself a goal for spending, maybe you want to travel or buy a car. It is good to also be aware of your savings as a safety net for when unexpected things happen like a new car tire or you lose your job. 

Here is a video that helps you break down what a budget might look like for you as someone with an income and bills to pay. If you’re not there yet but are still interested in saving, here is a video on how to do that on a smaller scale.

Breaking up your income

It may all seem overwhelming! That’s ok, there are some simple tricks to break up your income so you know what money is to pay for what. 

The 50/30/20 rule 

This strategy breaks up your income into 50% necessities, 30% wants, and 20% savings. This way you know what is a necessity and what you could live without (like that new pair of trendy shoes). 

You can play around with the percentages. Let’s say you are planning a big trip and maybe you want to save more, this might mean that your wants category is smaller or you are living at home, so you lessen your necessities category. 

What if that doesn’t work?

It’s hard to save when you are just trying to save because it’s ‘the right thing to do’. It’s much easier if you think of a specific goal to work towards. You can start off with smaller things like saving for a new bike or computer and once you have practice doing that, you’ll be able to save for bigger things. 

Spending leaks

Spending leaks are little things you buy that might only cost you a few dollars, but you buy them pretty regularly. When you made your budget you might have forgotten that you grab a coffee with friends most afternoons, or you buy a muffin on the way to school every day.

It might seem like nothing, but if you are doing it every day, or even every week, it all adds up. If you buy 3 bottles of coke a week at $3.50, that equals $10.50 a week — over $500 a year!

If you feel like you might need to cut down on your shopping, check out Youth Central’s guide to managing money for some great tips.

How can I fix a spending leak?

You have to decide which is more important, the coffee or working towards your savings goal. If you decide that the coffee is important, try setting yourself a limit each week. If you are someone who NEEDS your chocolate, buy a bulk bag of chocolate bars from the supermarket and pack yourself one each day rather than paying double at a vending machine. 

Spending tips:

• Set limits: Such as one new item a month, or you have to save a certain amount of money before you let yourself buy something new. 
• Avoid online shopping: making yourself go in-store means that it is harder for you to buy impulsively. It also means you can try on clothes so that you don’t waste money on things that don’t fit. 
• Take a breath: don’t buy something the same day you see it, wait at least a day so you know that you need what you are buying. 
• Buy second-hand: not only is it better for the environment but it is better for your wallet! Op-shops, vintage stores and online sites like Depop can offer the styles you want at a better price.
• Avoid buy now, pay later apps and services: companies like Afterpay, Klarna, and Latitude Pay make their money off the fees they charge their customers. Also, they make it easier for you to buy items you can’t afford and get tricked into having debt.
• Impose a spending freeze: don’t spend money on anything non-essential for a week (or a month if you’re brave). This will not only show you how much you spend on non-essential items but force you to save as much as possible in a short time. 

How to save on necessities

Food and essentials can be very expensive, especially in a cozzie livs situation. Here are some ways to avoid extra expenses in your grocery shop:

• Plan your meals: before you get to the supermarket or local grocer so that you are aware of everything you need and avoid over-buying or food waste. 
• Spread your shop out over multiple establishments: avoid relying on big supermarket chains like Woolies or Coles which tend to be more expensive – try seeing if your local grocer is cheaper. Comparing prices online before you go shopping means that you can find the best deals for your shop. 
• Buy in bulk: A cheaper choice in the long run. But, it’s good to remember that perishable items like milk or veggies can go off quickly if you live alone – so it’s a delicate balance of buying only what you need and thinking about what is going ti be cheaper in the long run.
• Check the unit price: Once you’re in the supermarket, you can check the unit price of the item instead of just picking the cheaper option — this means looking at which item is the cheapest by their standard unit of measurement, rather than what looks like the cheapest on the shelf. You can find this on the price tag on the rack of major supermarkets. 

For more help on tracking your spending, check out these MoneySmart tips.

So don’t just sit around, start saving!

• Figure how much you can afford to save each week
• Set a savings goal
• Keep an eye on how you spend your money
• Feel proud when you reach your goal!

Here are some apps that might help you: 

Go check out this article on the importance of budgeting and how you can manage this yourself with personal apps!

Pocketguard 

With this app, you can: 

• Schedule and track all your upcoming expenses like bills and groceries 
• Review your spending to notice unhelpful patterns 
• Set yourself spending goals like for an upcoming holiday or buying a car

Good Budget 

This app allows you to:

• Designate your income into different spending categories 
• Track your debt repayments 
• You can even sync your app to your partner, if you have one, so you can track what they are paying for in your relationship