Budgeting tips to save money

* Transcript created by AI – may contain errors or omissions from original podcast audio

If you are trying to save money by skipping coffees, but your rent or mortgage and groceries are bleeding, you dry. This episode is for you. Yeah, because if saving money feels hard, exhausting, or like it’s ruining your life, you’re probably doing it the hard way because you don’t save money by shrinking your life down.

You need to make better decisions around the big staff. The true way to save money is by getting intentional, and in today’s episode, I’m gonna share how you do that.

Just a quick note before we dive in. Everything I share on this podcast is general in nature and does not take your personal circumstances into account. I’m not a licensed financial advisor, and nothing you hear on this podcast should be taken as personalized, financial, business, taxation or investment advice.

Before you make any financial decisions, please seek guidance from your accountant or a qualified licensed financial advisor who understands your specific situation.

In last week’s episode of the podcast, I spoke about the power of budgeting and how to actually go and create your budget. So if you haven’t listened to that episode yet, make sure you go back and listen to that one as well. And today I want to talk to you about how to actually improve your money situation, especially if you didn’t like the outcome of your budget that you created.

Like maybe you found out you’re spending more than you’re earning, or maybe you wanna be saving even more, investing your future, or maybe you just wanna have more money for fun and play and freedom in your budget. The reason why people hate budgets and they struggle with sticking to them is because your budget.

Can feel restrictive, or you might have these stories that you’re bad about money, but I just wanna remind you that the whole reason you create a budget is to give you freedom and not restriction. Your budget is there to help you stop your money. Stress, not add more to it. So why do a lot of people get stuck when it comes to saving money?

Here is my first tip view is focus on the big stuff. A lot of times when people are trying to cut back, they think about the small things. Okay, I’m gonna stop getting takeaway coffee. I’ll catch the bus today instead of catching an Uber. But the truth is, most of your costs likely come from areas you completely ignore.

As I shared in last week’s episode, 70% of my household income comes from the Big five for us. So my big five are mortgage, groceries, general retail, healthcare and children’s expenses. And on the face of it, a lot of those you might think they are what they are. The mortgage is the mortgage, groceries are groceries.

But a lot of people have that exact attitude to their biggest expense categories. They just think it is what it is. I’m stuck with it, but it is an interesting start for you. The majority of mortgage holders ask chatGPT, estimated between 50 to 70% of mortgage holders rarely or never negotiate their rates to look to refinance and get a better rate.

Same with groceries. You might just think groceries it is what it is. But I know for my household, when we go through a period and we say we are actively going to look to reduce this category, when we actively seek out deals at are conscious of our spending in this area, we can save up to a hundred dollars a week.

So the point I’m trying to make is focus on the big ticket items first. Before you go chasing the smaller amounts, because yes, chasing the smaller amounts is definitely worthwhile. You might be trying to save $200 a month when there are $2,000 decisions quietly sitting in the background.

So that’s where I want you to start. Start with the big ticket, whatever they are for you. Those are mine. You might have your big five, might be different categories. But focus where most of your spending goes Next, we want to go into what I call values-based cost cutting. So as I mentioned in the last episode when we spoke about how to create your budget, I said to have a look at your plan and work out what is really important to you.

’cause here’s what happens. There’s a thing called lifestyle creep, which means that as you earn more, you start to spend more. Let me share. When I was 23, I bought my first house, and at the time I was on about $40,000 a year. I had a mortgage, a car, and I used to go out night clubbing literally every single weekend.

I went out so much more then than I do now, but the difference was. It was the way that I used to do things. So for example, I used to have a bus ticket and I would catch the bus in and out, so there was no incremental extra costs. I would always make sure I was on the last night bus home, which was at 12:15 PM That was the latest I could possibly leave.

I used to go in, they used to have deals. My gosh, it’s showing my age a bit here, but there used to be a deal where you could get $1 drinks before 8:00 PM. So I would go and buy my drinks for the entire evening before 8:00 PM and I’d just leave them sitting on a barrel on the edge of the nightclub. I have no idea how I didn’t get my drinks spiked, but that’s what I used to do back in the day.

Whereas these days, if I go out, which is very rarely, I’m certainly not going night clubbing, if I go out to a bar or something, I cannot even imagine catching a bus home at the end of the night. I would definitely be catching an Uber. So you can see that my lifestyle has crept, and I’ve noticed this in the space of holidaying as well because in recent years we’ve got used to luxury travel and I have to say it is very hard to go back.

So what we can see with lifestyle creep is that when your income increases. Now, yes. Part of earning more money is that you want to enjoy your life more, but you don’t wanna be spending all of that additional money. And even more, sometimes people are earning more and they actually get sloppier with their finances.

So what we wanna do is our valued based cost cutting. And this might be a little bit of hit and miss as you play around with it. So let me share some examples of how I’ve played around with values-based cost cutting and some things that we’ve stuck to and some things that we haven’t. So I used to always get my nails done.

I used to get acrylic nails and gel nails, and most of my adult life I have had my nails done. And when we’re reviewing our budget, I thought, do I really need to keep getting them done once a fortnight? So I took my nails off as a bit of a trial, and that was like nine months ago now. And honestly I rarely miss having them at all.

In fact I really like having the extra time back, but I used to spend sitting in the nail salon. Another area that we decided to trial cutting back in was the cleaner. And I thought, do you know what? We really wanna build our dream house. Maybe we cut back on getting our weekly cleaner. So we actually stopped getting a cleaner for a couple of months, and basically I became the cleaner and the day-to-day household stuff was actually fine, but what I really struggled to stay on top of was the deeper cleaning, cleaning the windows and things like that.

So we’ve now found a good middle ground, which is that we have a cleaner on a massively reduced hours just coming once a fortnight. But the only way we figured this out was playing around with what does it actually look like if we cut this back. Another area that we tried cutting back on was I said, do we really need to drink bottled wine if we’re just sitting at home on a Friday night?

Just me and you, why don’t we try what box won’t or cast wine? I don’t know. It’s been so long since I’ve tried it, and so we went and bought a couple to try it out, and I have to say. No judgment, but it was a hell no from us. The only brand we actually liked was ironically the same price. It’s a bottle of wine and it was literally exactly the same price to buy the box as it is to buy the actual bottles of that particular brand.

But, I’m glad we gave it a try. Sometimes you need to go and try these things to find out what is and isn’t important to you. So value-based cost cutting is your next area to dive into. The next way to be saving money is an area that not a lot of money [00:10:00] coaches actually talk about, but it is a very clever way to improve your financial situation and add more money so you can save more money, and that is by growing your income.

Because savings have a ceiling. There’s only so much you can cut back before life starts to feel very small or before it’s actually, impossible to cut it back. You need to have a roof over your head. You need to eat. Whereas income doesn’t have a limit. So some ways that you can start to grow your income is ask for a pay rise.

Start a business. If you’ve been in my world for a while, you might know that I’m also a business coach. I help people to grow their businesses. You could look to start a side hustle. Now you need to pick, if you do have a full-time job, make sure that you do pick a side income that actually fits with your life.

And example of something that I’ve done, I’ve just registered for pet sitting. My family love animals. I do not want the commitment of having a, a dog or a cat right now. But I do love animals. And we’ve been dog sitting for all of our friends and family for years, and I thought why not get paid for it?

Another thing that you might do if you do go and ask for the pay rise and it’s unsuccessful, why don’t you have a look at like, how can I create skills that are gonna add more value to my employer? So that I can command a pay rise, this is about growing your capacity for wealth and actually creating more income rather than trying to cut back.

And the last area that I want to talk to you about if saving is important to you is using automation as a savings weapon. I’ve spoken about this on the podcast before, but when you automate things, your willpower isn’t required, and the best way to get started is to start small. Just have an automatic transfer set up where $5, $10, $20, $50, a hundred dollars, whatever it is a week is transferred out for investments for savings.

And what I do with this, I remember when we first started this, I started very small. I just increase it over time. You’ll be amazed how quickly it adds up when you just don’t even think about it. The money’s just gone before you even see it. So automation is your savings weapon. Now again, these are just top level ways to get started in improving your financial situation, your savings.

If you want some more help in this area, the Intentional Money membership is starting very soon. So jump on the way, at least via the show notes for today’s episode, and I’ll be sharing how you can be working with me to be growing your. Savings to be improving your financial position, or if you are someone who does want a little bit more handholding, if you are someone who prefers a bit more one-on-one support in this area, I’m also offering personal money coaching, so email me.

My email is clare@clarewood.com. C-L-A-R-E W-O-O-D. So it’s just clare@clarewood.com and I’ll share the ways that I could help you in a one-on-one capacity. Or you can jump on the wait list for the membership and I’ll be sharing again how I can be helping you with your budgeting. With your savings, how I can actually help you with your setting up your side hustle.

I am really delighted to be on this money journey with you, and I hope that this is the start of your money transformation. Drop me an email as well, let me know, or a DM on Instagram. Let me know how you go with trying out some of these strategies. I can’t wait to celebrate your wins with you. Have a beautiful week and I can’t wait to chat to you again next week on The Intentional Money Show with Clare Wood. Adios.

* Transcript created by AI – may contain errors or omissions from original podcast