Welcome to part 1 my guide to help you save money. I’m guessing if you’re a student and reading this, you probably don’t have a tonne of disposable income. I’m hoping that by reading this, you’ll be able to free up some cash to put towards investing in your future! Whilst I wrote this with students in mind, I think there’s some useful for stuff everyone in here. Now let’s get to it!
Before Anything, Budget!
You will get nowhere fast if you don’t do a little bit of planning about what you want to do with your money each pay. I know it seems like a great idea when you paid to think “I’ll save what I have left when I get my next pay”, but let’s be real. How often do you have anything left to spend? When I used to do this, I’d get to the last few days before pay and see all this extra cash and blow it on whatever stupid thing I wanted at the time. So, when you get paid have a set amount that you save or invest and move that money before paying bills or going about your week. It doesn’t have to be a huge amount; it just has to be a set amount each pay.
Set up a savings account with a different bank!
Next, I suggest setting up a savings account with a bank that is separate to your everyday transaction account. I recommend this because it means anytime you want to access those savings, you have to wait until the next business day. Most banks don’t offer instant transactions between to other banks. This may seem weird, but when you are tempted to buy something impulsively, you have to wait and can’t wreck the hard work you’ve been putting into saving all that money.
Sell your stuff
Alright, finally onto the things to help you free up some cash. This one is pretty simple, sell some of your stuff. Last month I sold 2 old dead phones and a tablet for $135 and at the end of last year I sold my childhood Lego collection for around $400. Obviously this isn’t a sustainable source of income and not everyone has stuff lying around to sell. But, I’m sure most of us could look around your house and find some old tech, or some old clothes that we’ve barely worn. They are gaining no value there and taking up space, so turn them into cash for yourself!
Cull your Monthly Subscriptions
This type of expenses is a quiet killer. When was the last time you noticed a rarely used subscription service on your bank statement and thought $10 dollars isn’t that much, I’ll just leave it. While $10 dollars isn’t huge amount, it adds up to $120 a year, and over the course of your working life assuming an age 65 retirement, equals about $50k. All that for one little subscription you couldn’t be bothered to cancel.
This is easy enough to fix though. Go through your bank statement and make a list of all monthly subscriptions you have and categorise them into haven’t used, barely used and use often. Cancel anything you haven’t used in the last 6 months (even gym memberships!), that’s the easy part. Now for the ones you rarely use, figure out if you really need them. In most cases unless you have a strong case for why you need it in your mind, you don’t, so cancel it! Finally, there’s the ones you do use often. Where you can, look to consolidate your accounts with your friends. There’s no reason for everyone on the planet to have their own Netflix and Spotify account. If you buy the largest plan you’re allowed multiple devices so find some friends and share the account. Instead of paying $10 each, you’ll end up paying $3-4. Again, this doesn’t look like much but remember how much that $10 added up to. If you can combine or cancel a few of these subscriptions, you’ll find yourself with more money free each month.
Switch to a BYO phone plan
Phone plans are a close cousin to the monthly subscription plan. I have only recently clued onto the amount of savings you can achieve by swapping to a BYO phone plan. For those who don’t know what these are, instead of receiving a phone with your plan, you bring your own and only pay for the service at a much cheaper rate. With phones being fragile this isn’t always an option but you can save quite a lot of money by doing so.
I recently swapped to the SIM only $40 plan which has unlimited calls and 10GB of data, from my $100 plan with unlimited calls and 18GB. I realise it’s a much smaller amount of data with the plan but after looking at my usage I rarely used over 10GB, so why pay $60 dollars each month for something I wasn’t using. To upgrade I had to pay out the remaining handset repayments which totalled $310, made over 3 monthly repayments. Again, this seems like a bad choice but I did the maths and over the course of my plan it will save me $290 dollars. It worked out I had 10 months left on my plan, so if I continued to pay $100 a month I would have paid $1000 for the rest of my plan (10 x $100). By switching to the BYO plan I pay the $310 over the first 3 months as well as 10 months of $40 for a total of $710. After the first 3 months, I will have $60 each month, free for saving or investing instead of wasted on data I didn’t use. If you have a working phone and are in a position to do this I think it’s a great way to free up cash.
That’s it for part 1! I understand a huge barrier to entry for students to investing is a lack of spare cash. I hope some of you will be able to use this guide to help start your investing journey. I’ve got quite a few more tips that wouldn’t fit in this post so keep an eye out for follow up parts. Thanks again for reading and please let me know in the comments if you plan on trying any of the tips, or if you have had success using similar strategies in the past. Keep an eye out for part 2 which I’m aiming to have out soon.