How to make your money go further

Article Category: Finance  |   

Not long ago, we put together a tongue-in-cheek article featuring some of the crazy lengths people will go to in order to stretch their budgets. Here at the The Calculator Site, we pride ourselves on listening to what you want and, from visitor comments and emails, it has become apparent that many of you want some real, actionable ideas. So, with those comments in mind, I've put together some real world, and more sensible ideas, guaranteed to make your dollars go that little bit further.

Get A Spare Change Jar

Spare change jar - photo

Yes, it's an old fashioned way of budgeting, but it works. Chucking all your spare change into a jar can be a very effective way of building up a nice little source of spare cash. Obviously, you will to exercise a bit of willpower in order to stop yourself dipping into the jar, but we know you have the resolve of a Spartan warrior, right?

Tip: don't be tempted to leave the money in the jar for too long or you might just find it becomes a source of easy cash for those indulgence purchases we swear "we need". Do yourself a favor and form a positive habit of dropping all your spare change into the jar when you get home at the end of each day. Mark off a suitable day on the calendar and make this your cue to visit the bank.

I did this and, to my surprise, banked a little over $300 dollars at the end of last month.

Kill That Dirty Habit

Smoking! Sorry people, but it's dirty and does a pretty good job of making a mess of your body. But I'm not going to dwell on the health benefits - you're all big boys and girls and can probably weigh up the impact to your health (without me sniping from the sidelines).

How much does a packet of cigarettes cost? $5.50, roughly? Let's say you get through thirty smokes a day. Now multiply that by 365 and you have the eye watering sum of $3,011.25. Ok, as an ex-smoker I know which I'd prefer to have in my pocket.

I'm not going to preach - the figures are there in black and white.

Ditch Those Credit Cards

Shredding a credit card

There are a number of excellent articles on this website that give you the ins and outs of credit cards and some recommendations on using them to help rebuild your credit score. Admittedly, in those articles we recommend keeping hold of cards that no longer carry a balance as they can be a positive influence on your credit score. But, sometimes you need to know when to cut and run.

Most card companies know how, as human beings, we can be incredibly weak-willed when it comes to seeing the money on the table. They'll smooth talk you with promises of redeemable points every time you pay with plastic or find ways to convince you to use plastic to pay for your holiday (and then spend your hard earned holiday fund on a house extension).

Show your personal finances a little respect: shred those cards and cancel your account (but only after you've finished rebuilding your credit score).

Say Goodbye to Dollar Stores

Dollar stores have been touted as the answer to our financial woes. What people don't tell you is that an awful lot of what they sell won't last more than five minutes. To add to that, branded products are often downsized. So, they may be cheaper, but they're also smaller. In the vast majority of cases, quality costs money and you expect to pay pretty close to top dollar to get that quality. Cheaper isn't always better!

Sure, dollar stores are good for some things (cheap toothpaste and, maybe, some unattractive, outsized underwear). But are you really going to buy your favorite niece a $1 birthday present?

Like I said, never totally discount using dollar stores but, if you want quality goods that last (and, ultimately, save you money) then you might just need to pay more premium prices.

Make Every Day Christmas Day

You've heard of banks that give savers a chance to use their 'Christmas Club', right? If not, let's do a quick recap - the club is effectively a savings account into which depositors make regular, monthly contributions. Just before Christmas the bank issues the saver with a juicy check (complete with a dusting of interest). All the saver has to do is spend it!

But do you really need a bank to help you save money? After all, I'm kind of hoping you've already started throwing all your change into jar in the hallway so why not take it one step further? Commit to small, but regular amount of money you don't need.

Even saving a relatively trivial sum such as $10 will give you a healthy $500 to spend at Christmas.

Buy in Bulk

Remember how I said that paying premium prices can save you money in the long run? Well, here's an even better way to stretch your budget - buy in bulk. The idea has been around for a long time and we're all aware that big high street stores use bulk buying to drive down cost to the customer whilst maintaining a healthy profit margin. So why not copy them?

Costco is a prime example of where buying in bulk can slash your bills. But it gets better - companies such as now give you the option of pooling your resources with other online shoppers to drive down the cost of pretty much anything you want. It's the power of group buying. Can't find what you want? Form a group of friends and family, or even the members of your neighborhood and use your collective buying power to drive down costs.

Tip: running your own group buying scheme can be a bit hit and miss if some members don't commit to buy - get a commitment from everyone before making your play for a $200 discount on a bulk order of flat screen televisions.

Track Your Spending

I can already hear the words falling from your mouth as you read this tip: "Oh goody, I get to fill out a spread sheet - can't wait!" But hold up! This works and if you've ever tried to track your spending then you know it's a very effective way of controlling your spending. I know it's dull having to sit in front of your computer typing in long lines of numbers (I apologize to any accountants who love their job) and that's why some bright sparks invented software to do the job for you.

There is a plethora of tools out there that take the mundane task of home accounting and make it look sexy. We've already covered some of the best budgeting apps for tablets; all you have to do is take your pick from either our iPad or Android articles. This really works! Write it down.

Plan Your Spending

Monthly budget planning on a piece of paper

This one goes hand in hand with using an accounting application to track your budgets and some might argue they're one and the same - but they're not. Tracking your spending is historical. When you plan you set yourself a target and a budget.

Sure, you need to understand how much you have to spend (and that's where tracking comes into play). But, by planning you're attempting to remove the curse of temptation. By writing down exactly what you need and sticking to only what's on the list, you should reduce the temptation to impulse buy (which is one of the easiest ways to kill your finances).

Tip: knowing the layout of your local supermarket will help you navigate past those shiny yet very expensive temptations waiting to ambush you and raid your wallet.

Do a Sanity Check

Ok, so you've used an app to plan your budget for the month. Then you wrote a shopping plan and, near as possible, you stuck to the plan. After all, how effective is a plan if you never set the wheels in motion. So what's next? The sanity check, of course.

Don't worry - nobody is coming to get you. No, what you need to do is look at everything you bought on your last shopping trip and ask yourself if you really need it. And I mean 'really' need it.

Definition of a bargain:

Something you really don't need at a price you can't possibly resist.

Toilet paper and clothes are pretty much necessary in modern society, but did you really need to buy a vase that vaguely resembles the profile of Harrison Ford? Probably not.

Impulse buys are named as such because the retailers know just how to sucker punch you into snapping up a bargain you never knew you needed.

Check your bags and receipts and if you don't need it then make a mental note not to get caught in that particular trap again.

Use All Resources

Let's say you're really broke. I know it's not nice - I've been there myself (although that was about twenty years ago) and I learned some valuable lessons. The most important lesson was that we're all far more capable than we realize. The second lesson is that, nowadays, there's far more support for anyone who is truly in need.

If you're living on the breadline and finances are really dire then maybe it's time to find your nearest food bank. Crazy idea? No, not at all. A 2012 report from the BBC found a significant number of US middle class families reliant on food banks. The worst part? The problem is growing.

Don't be ashamed - if you need it then ask.

I didn't say any of these tips would be pain-free; budgeting sometimes means giving up the little luxuries in life.

During the course of writing this article I thought about how the above tips could be condensed into a sensible and easy to remember checklist. I came up with a list of four questions which you can easily apply every time you have to deal with your finances:

Simple checklist for budgeting

  1. Do I really need this?
  2. Can I actually afford it without having to miss out on an essential?
  3. Beyond the essentials such as food, does it bring any value to my life?
  4. If you answer no to any of the above - put it back on the shelf.

I know it's quite harsh, but give it a shot - I guarantee it's very effective.

Written by James Redden.

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Last update: 02 May 2014

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