These are all useful. But, on their own, are unlikely to have a significant impact on your money situation.
You want to reduce your debt, increase your savings, and gain financial security sooner rather than later. So, it makes sense to target the high impact areas first.
Your biggest expenses also provide you with the biggest opportunities to make changes to your financial situation. So, let’s look at how you can save money, live better and make the biggest impact to your financial situation.
Save Money, Live Better: Make The Biggest Impact On Your Finances
Reconsider Your Residence
Rents, rates, mortgages, maintenance, household bills and furnishings… these expenses consume the largest chunk of your income. The good news is that modifying these outgoings can have an enormous impact on your financial situation.
The average house size has increased dramatically over the last four decades, even though the number of people per household has decreased.
Larger houses cost more, produce higher bills and require more maintenance – and you end up buying more “stuff” to fill them with!
Consider your home situation, whether you rent or own. Relocating to a less in-demand area and/or choosing a more modest home could cut your living costs significantly. It can even take years off your mortgage.
Would you rather work longer hours or for extra decades just to have a bigger, fancier home than you need, or live comfortably in a modest house and gain financial freedom faster? Changing your living situation is the fastest way to start saving money.
Transform Your Transportation
Unlike property, cars are considered a poor investment. Unless you are buying a classic collector’s vehicle, it starts to lose value the minute you begin driving it. So, just like the house situation, be thoughtful about what kind of car you want vs what type of car you need.
Related post: The first step to becoming “dumb” debt free
Do you really need a 7-seater SUV or a giant ute if you just drive your small family around town? Perhaps a hatchback or an electric vehicle could be the wheels for you!
On top of the vehicle itself, you're looking at quite terrifying petrol prices in NZ. This is another area where getting savvy about your spending can save you hundreds of dollars every month. Consider alternatives to commuting, like carpooling, public transport, walking or biking.
The bonus is that these options are all better for the environment, and you might be able to cut costs by getting your workout in during your commute rather than paying for the gym.
Factoring In Food
Yes, we’ve all gotta eat, but if you add up how much you spend on food and drink every week (beyond your grocery bill), you would probably feel a little dizzy. Snacks, stuff that wasn’t on the list (but we bought it anyway), and impromptu fast food drop-ins on the way home – these all add up in a big way.
Planning is the answer here. If you have time, plan your meals in advance and use click and collect or delivery to save time. That way, you will avoid those impulse hunger purchases at the supermarket and be more likely to stick to your plan than hit up a drive-through on the way home.
If you don’t have time to plan your meals, consider ordering a weekly food box delivery. These aren’t as expensive as you might assume. They save you time, stress, and result in fewer impulse buys at the supermarket! Plus, with Woop, there is no food wastage as all the ingredients come already portioned out for you.
For more info on choosing the right food box service for you, check out the recent blog I wrote.
Save Money, Live Better… With Taxes?
For many of us, taxes go in the too hard basket. We do the bare minimum and can’t be bothered looking any further. But what if paying attention to your taxes could result in extra money in the bank!
If you own your own business, this is particularly important. Many of your expenses can be deducted. For example, if you work from home, you can claim for using part of your home as an office, for phone and internet bills and even part of your power bill.
You may need to invest in an accountant to help you out, but it’s well worth it if they end up saving you money.
While it is great to save a couple of bucks here and there, you are going to be able to make the biggest differences in the areas where you spend the most money. In order to save money, live better and see real change, you have to look at the big money.
So, apart from housing, food, transportation and taxes, think about where the rest of your money disappears off to. It doesn’t simply fade away into a black hole, although sometimes it can feel like it!
Look at where you are spending big chunks of money. These are the areas where you can save money, live better and make the biggest impact to your financial situation.
You don’t have to deprive yourself of all the things you love to save money. In fact, by saving lots of money on the big things, you can afford to splurge a little on the smaller things now and then.
It’s time we became more conscious about the flow of our finances and choose where, when and how we use our money. Make it work for you, not the other way around.
And, if you would like to know more about creating leveraged income opportunities, download my epic free resource here.