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How to make saving easy

August 26th, 2011 -

We all wish we had a nest egg tucked away for emergencies or retirement but most of us find it hard to save.  Saving isn’t hard if you take it step by step

Step one: Budget

Take time to review your spending and fixed expenses.  List your fixed household expenses like rent/mortgage repayments, power, insurance and phone. Then review your grocery, entertainment and spending to work out how much you are spending and how much of that was necessary spending.  Once you have an idea of what are regular expenses and what is luxury spending you can set weekly or monthly budgets.  Excellent budgeting tools can be found at www.sorted.co.nz

Step two: Minimise debt

We all have accumulated some debt whether it is hire purchase, credit card or overdraft.  Consolidating your existing debt into one simple to manage loan may save you hundreds of dollars and every dollar saved is an extra dollar in your growing nest egg!

Step three: Shop around

Especially when buying big ticket items, it is important to shop around and compare prices before making the purchase.  This does not just apply to one off purchases.  Your existing phone and power providers should be reviewed regularly.  Consumer NZ has set up the Powerswitch website (www.whatsmynumber.org.nz), which allows you to price compare power suppliers.

Step four: Use less

We live in a consumer society and many purchase decisions are made based on convenience – eg buying takeaways rather than cooking dinner or turning the heater on rather than putting on an extra layer of clothing.  This spending or consuming may seem relatively low cost but committing to using less will add up.

Step five: Save regularly

Now that you have worked through steps one to four you will hopefully discover that you do have some money left over each week.  A great way to ensure that you do save is to set up a special savings account – this will make it more difficult for you to spend your hard earned savings!

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