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6 clever tactics to help you save funds in 2021

Without a doubt, 2020 has driven home to Australians the importance of having emergency funds on hand should we become the victims of events beyond our control.

As we look towards 2021, many of us are planning our budgets for the year ahead, so it’s a great time to implement a few handy budgeting tactics.

Licensed financial adviser and spokesperson Helen Baker says: “Designing and sticking to a savings strategy requires a change in mindset and the formation of new habits. The first few weeks might be challenging, as it requires some sacrifice, but it soon becomes a ‘set and forget’ component of your financial life that brings a strong purpose and peace of mind knowing that you will face certain challenges and can work towards particular goals without facing a financial crisis.”

Ms Baker suggests the following six tactics that anyone can implement in 2021:

1. Use the 50-30-20 strategy to control your spending. “This simple yet effective budgeting method involves dividing your after-tax income into three categories to help you take control of your spending,” Ms Baker says. “Put 50 per cent of your net income towards ‘must-haves’ such as rent, utility bills, groceries, and insurance. Then reserve 30 per cent for your ‘wants’, such as dining out, clothing, and entertainment, which will allow you to reward yourself in moderation. Set aside the remaining 20 per cent for loan repayments or building up your savings.”

2. Implement a waiting period before purchases to avoid impulse buying. “Spending on ‘wants’ can often be driven by emotion or boredom,” Ms Baker says. “Prevent impulse buying of, and overspending on, your ‘wants’ by enforcing a waiting system. This tactic ensures you take a step back – even for an hour – to assess whether the transaction is really worth it. If you are trying to form a new habit and the temptation is very strong, you might benefit from implementing a 24-hour or week-long waiting period.”

3. Wean yourself off credit card dependency. “A clever strategy using multiple bank accounts could help wean you off credit card dependency. Open three bank accounts: one for everyday spending, one for savings, and one for bill payments. Work out how much money you need to pay your bills every month. On the day your income goes into your everyday expense account, transfer those funds into your monthly bills account, from where you could set up direct debit bill payments. Work out how much money you would like to save each month to meet your financial goals … The rest of the funds in your everyday spending account is for discretionary spending.”

4. Hide your savings account. “When you set up a savings account, to reduce the temptation to dip into your savings, ensure you cannot access it through your phone banking app,” Ms Baker says. “Another useful tip is to choose a savings account that charges withdrawal fees. The harder and more expensive it is to access this account, the more likely you are to realise your savings goals.” 

5. Create a bill-paying strategy to avoid incurring late fees. “Outline all your bills in a spreadsheet, ensuring you make a note of when each payment is due. Go through each invoice to figure out how many days you have before incurring a late fee and put reminders in your calendar,” Ms Baker says. “Ensure your calendar gives you adequate time to thoroughly check invoices and make sure you are not being overcharged. Group your bills in categories of under $100, $100-500, and $500-plus. Smaller bills, such as mobile phone plans or other monthly service utilities, can be paid by setting up automatic payments. Larger bills, such as tax, rent or mortgage repayments, require more diligence. It is also crucial to pay substantial bills on time to avoid incurring a bad credit rating.” 

6. Use budget spreadsheets and calculators from financial information sites. “There are good financial websites that offer budgeting tools to help you manage your cash flow and improve your savings. For example, offers a free budget planning spreadsheet to ensure you stick to a savings and spending plan. Tools such as the pay calculator also allows you to clearly see how your income and taxes are broken down, to give you a realistic picture of your spending limits.