Living in a high-cost environment can be challenging, but with the right strategies you can still save money and thrive. In this blog we will explore some effective tips for saving money when the cost of living is high.
1. Use Websites and Apps To Help Save
One effective way to save money in a high-cost environment is to take advantage of cost-saving websites and apps. These tools, such as PowerSwitch, Gaspy, or Grocer, can help you uncover hidden opportunities for savings by comparing prices, finding discounts, and discovering deals that may not be available elsewhere.
- PowerSwitch compares electricity and gas prices from different providers in your area. By entering your postcode, you can choose the most cost-effective plan for your needs, resulting in significant savings on your monthly utility bills without sacrificing quality or reliability.
- Gaspy shows you the cost of fuel at different gas stations in your area. This
enables you to find the cheapest local fuel prices and potentially
save you a significant amount of money over time. - Grocer allows you to compare the price of items from your local
supermarkets, and create a shopping list. This enables you to find the lowest
prices for the items you need, helping you save money on your grocery bill
and make your shopping experience more cost-effective.
2. Create a Detailed Budget
Categorising your expenses is an essential step in gaining a comprehensive understanding of your financial situation. It identifies areas where you are overspending and finds opportunities to cut back. This process allows you to make informed decisions about your spending habits and prioritise your savings goals effectively.
Check out our blog 7 Steps to creating a monthly budget
Create a detailed budget and categorise your expenses using www.Sorted.org.nz and PocketSmith which provide user-friendly interfaces making budgeting easier for you.
By using the budgeting tool at Sorted.org.nz, you are able to set up a budget and track your expenses in different categories. The website also offers helpful resources and tools to educate and guide you on your financial journey.
PocketSmith automatically categorises your bank transactions, saving you time and effort. The app also provides reports to help you understand your spending patterns and make informed budget decisions.
By using these websites and apps, you can create a detailed budget that accurately reflects your financial situation. It enables you to identify areas you can make adjustments to and help you reach your savings goals.
3. Reduce Unnecessary Spending
Establish a monthly limit for unnecessary spending activities such as dining out, entertainment, and unnecessary shopping.
Here are some ideas for how to reduce unnecessary spending:
- Try cooking meals at home using budget-friendly ingredients.
- Explore free or low-cost entertainment options like visiting local parks, attending community events, or enjoying movie nights at home.
- Avoid impulse purchases by creating a shopping list and sticking to it.
By being conscious of your spending habits, you can significantly reduce unnecessary expenses and allocate more funds towards your savings
4. Increase Income
In a high-cost environment, finding ways to increase your income can greatly contribute to your savings. Some ways of doing this could involve:
- Seek a pay rise. check out this article on How to ask for a pay rise.
- Look for part-time job opportunities that align with your skills or interests. It
could be gig economy jobs that you can do in your spare time such as
tutoring, freelance work, or a food delivery driver. Check out this article on
How to make money in the New Zealand gig economy. - Consider selling used items on online marketplaces or organising a garage
sale.
5. Set up Automatic Savings
Setting up automatic transfers from your main bank account to a trusted savings account can help you master the habit of saving money. This approach allows you to prioritise your savings goals and avoid unnecessary discretionary spending by keeping your savings out of reach, ultimately paving the way for a substantial down payment on your dream home.
For a list of the best savings accounts, check out this article from Canstar: Best Savings Accounts.
6. Explore more affordable housing alternatives
Consider a lower-priced rental to help you save money for your first home. This may be easier said than done, as finding affordable rentals in a high-cost environment can be challenging. However, making some short-term sacrifices can greatly benefit your long-term savings goals.
By cutting down on rent expenses, you can free up more funds to put towards your first home deposit and overall savings. Look for rentals in less expensive neighbourhoods or consider downsizing to a smaller space. While it may require adjusting your lifestyle temporarily, the savings you accumulate will be worth it in the end.
Another alternative to consider is temporarily sharing a flat with others as you work towards saving for your first home. This option not only helps to reduce your monthly housing costs, but it also allows you to split other expenses like utilities and groceries.
7. Use Public Transport
As the fuel tax discount comes to an end, New Zealand residents are feeling the impact as gas prices soar to an estimated $3 per litre.
Public transportation is a practical and cost-effective alternative to driving, especially during this economic crisis. By opting for public transport, you can save money on gas and eliminate the need for expensive parking. Using public transport is a much more affordable option compared to rising gas prices and parking fees.
Additionally, public transportation offers a range of benefits beyond cost savings. It provides an opportunity for you to relax, catch up on work, or engage in leisure activities during your commute. With free Wi-Fi available on many buses and trains, passengers can make productive use of their travel time.
To make the most of public transportation, plan your journeys using AT's website or mobile app, which provides real-time information on schedules, routes, and fares. Also, consider purchasing a monthly pass or discount card to further reduce your transportation expenses.
