Ways to save money

19 quick-fire ways to cut expenses

The great depression of the 1930’s spurred a “waste not want not” attitude that defined consumer patterns for a generation. Decades later, the oil supply shock in the 70’s led to the first efforts of energy conservation and efficiency. In more recent times, we quickly progressed from usual life to a covid-struck situation.

To help keep more funds in your back pocket, here’s a quick-fire list of 19 ways you can save money.

1. Cancel unused memberships and subscriptions

If you’re on the fence about any of your memberships and subscriptions, or find that you’re not using them very often, cancel them. Even at the best of times a gym membership is a waste of money for most people. Remember, you can always renew the membership later if it turns out that you miss it.

2. Turn off the lights

Keeping the lights on in your home may not be expensive on a per-watt basis, but it sure does cost money over time. To save as much as you can, turn off lights any time you leave your house – or even when you leave the room. Turning off lights when you have plenty of natural sunlight can also help keep your electric bill down over time. The bottom line: If you aren’t using a light, turn it off.

3. Do a tax return

Saving money on taxes is still saving money! Filing a tax return is a lot easier than you might think – the IRD let you do it online – and most Kiwis have simple enough financial situations that they can do it themselves. Why bother? Because some things that you may not have considered are actually tax deductible, such as premiums for income protection insurance (provided the benefit from the insurance policy is taxable such as an indemnity policy).

Also, if you’ve donated to charity over the last financial year, 1 April to 31 March, then you may be able to claim the tax back on that too.

4. Repair clothing

Most basic sewing jobs can be completed by anyone. Not sure how? – watch a YouTube video or two and spend some of your lockdown time learning a new skill!

This might mean sewing a new button on a shirt with some closely matched thread or patching a hole in some old pants to save them for times when you’re working around the house.

5. Avoid financial rip-offs

Payday loans and bank fees are among the seven worst financial rip-offs.

6. Get in touch with creditors (companies or people you owe money)

Count your liabilities, contact all your creditors and ask about ways to delay payments without incurring late fees and other charges.

Ask about lowering the interest rate, even for a limited period.

7. Clean your heat pump filters

As dust builds up in your heat pump filters, your heat pump will not only have to work harder, it won’t be able to remove all dust and allergens from the air. Cleaning the filters will keep it operating efficiently – which saves power – and it’ll also help you breath cleaner air too.

Read your heat pump manual or Google your model number to see how to clean your specific filter and check how often the manufacturer suggests cleaning the filter. If you’re isolated at home and have it on more than usual, it might be a good idea to clean it even more regularly than they advise!

8. Maintain other appliances too

Check them to make sure there isn’t any dust clogging them and that they’re clean. Look behind the appliances and use your vacuum to gently clear away dust. Check all the vents, especially on refrigerators and dryers. The less dust you have blocking the mechanics of these devices, the more efficiently they’ll run (saving on your energy bill) and the longer they’ll last (saving on replacement costs). For example, a fridge works by running coolant through all those little pipes on the back – if they’re dusty, the coolant doesn’t cool down as well, so the fridge must work harder to compensate.

9. Check all your statements to find things to cut

Get your detective hat on and start searching through all your credit card bills and bank statements to find any one-off or regular expenses that can be cut.

10. Unsubscribe

Avoid temptation by unsubscribing from marketing emails and texts from stores where you spend the most money.

11. Use vouchers or store credit

Have you got unused or partially used vouchers just lying around? Perhaps you’ve got an unused in-store credit?

As grim as it sounds, if you don’t use a voucher and that company goes bust, your voucher is nearly certainly worthless. This means that instead of “sitting on it”, your best bet is to use what you’ve got!

12. Refinance your mortgage

It’s worth exploring if you can refix or refinance your mortgage to a lower interest rate. On a 30-year $300,000 mortgage, lowering the rate from four percent to three percent can save you more than $60,000 in interest charges over the life of the loan.

13. Master the 30-day rule

Avoiding instant gratification or retail therapy is one of the most important rules of personal finance. Waiting 30 days to decide on a purchase is an excellent way to implement that rule.

Quite often, after a month has passed, you’ll find that the urge to buy has passed as well, and you’ll have saved yourself some money simply by waiting. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s truly worth the money.

14. See if you’re eligible for a short-term pause in your insurance payments

Did you know some insurance companies offer short-term relief from ongoing payments (“premiums holiday”) if you can show a sudden and unexpected 20% net reduction in your income? If you’re eligible, you might get to keep your existing level of insurance cover and legitimately won’t have to pay for it for a few months’ while you get back on your feet.

15. Weatherproof your home

Plug holes and cracks that let warm air escape in the winter and cold air escape in the summer.

You should be able to get materials and possibly advice about this from your local hardware store about inexpensively stopping unwanted heat or cooling loss. A little time spent researching this online might go a long way to save on your winter heating bills.

16. Use energy efficient bulbs

Energy-efficient light bulbs might cost a bit more initially, but they have a much longer life than normal incandescent bulbs and use far less electricity. It might be hard to decide which type to use, but any type of efficient bulb will probably be an upgrade if you’re not using them already.

17. If you can, think twice before taking a mortgage holiday

This might sound like the opposite of point #6 above, so allow us to explain…

A mortgage repayments holiday scheme was has been launched by the main banks in response to the epidemic; however, this “holiday” might not be as good as it first sounds. While the details differ by bank, if you have experienced an income drop due to Covid-19 you can stop paying your home loan for up to six months.

The catch is that interest will still build up, and because you’re not making repayments it will build fast and could add years onto a mortgage. The best bet is usually to avoid this ‘holiday’ if you can afford to, but if not, check with our mortgage advisers to see what your options might be.

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18. Minimise or quit your vices, e.g. alcohol, smoking, gambling

Bad habits cost!

For example, if you’re still a smoker, you surely know by now that your habit is not only expensive, but potentially deadly as well. If you want to add years to your life and save a boatload of money, the easiest thing to do is to stop smoking altogether.

Giving up a bad habit such as smoking can also save on other indirect costs too. For instance, if you quit smoking - you probably won’t spend so much on chewing gum, lighters, air freshener, personal insurance costs, and long-term health costs.

19. Save money on groceries

If you haven’t already, see these eight ways you can save money at the supermarket.

The bottom line

Instead of cutting expenses, we usually encourage investing and growing income as the best ways to get ahead. However, times are currently tough so our advice right now is to be tough with your expenses and find ways to reduce household costs.

Keep in mind that some expenses - as outlined in the seven ways the wealthy spend their money should ideally be continued if you can.

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