With a new year comes new goals, but new year’s resolutions can often fail before we know it. We can put a lot of pressure on ourselves with the “new year, new me” mentality. Perhaps your goal for 2024 is to spend less, which may sound easier said than done right now.
“Just save 10% of your income… stop buying takeaway coffee… put away $192 each week and you’ll have $10,000 by the end of the year." Everyone and their mother has tips, both wanted and unwanted, and these tips often don’t adapt with economic changes. It can all begin to sound a bit patronising after a while.
When it comes to trying to spend less, we generally go one of two ways. One, we cut out everything fun and then fall completely off the wagon and feel bad about it; or two, we cut back on a few things here and there, and then come unstuck when $1,000 for car insurance is gone from our accounts and all our savings are gone just like that.
This time around, you could consider spreading all of your expenses evenly across the course of the year. You would do this by adding up the total cost of all your expenses for the year (and we mean everything, not just the essentials), and then breaking the totals down in line with your pay period, such as weekly for fortnightly. $1,000 for car insurance? Daunting. $84 a month or $39 a fortnight for car insurance? Doable.
The idea here is that you’re giving yourself the same level of expenses each pay period, and also the same amount of money left over.
Say you work it all out and you’ve got $200 left over. You might save it, spend it or pay off some debt. Knowing this is how much you have each pay may make you more inclined to hold onto it instead of spending it. Maybe it will spur you to try and to increase that $200 and look for ways to cut back on other expenses.
For example, if you spend $70 each month on your phone plan, that’s $840 a year. Could you switch to a monthly pre-paid plan with the roughly the same offerings for $50 every 28 days? That’s $652 a year. For a fortnightly pay period, that’s $33 vs $25. Have a streaming service or two? Consider pausing a service every month or so.
This method isn’t about cutting back on everything, but getting into a position of being more aware of your expenses overall. This way, you may not feel like you need to go without to save money. Really like getting your hair done or having that gym membership? Look at how much you spend on going out or food delivery and see if a little cut here and there would help you cover it.
Often when faced with increasing expenses we opt to cut back on important things like insurances or looking after ourselves because they are larger, upfront chunks. By smoothing out all your expenses into even amounts, you make it easier to identify areas to look into cutting back on without being at risk of health issues or underinsurance.
