Money Tips 11 to 20 Explained (#MoneyTips)

Time for my second set of 10 money tips to gain an explanation. I have been posting my thoughts on money to Twitter (using the hash tag #MoneyTips) and found that some of them were very hard to keep within that magic but annoying 140 character limit. So far I have managed it, however sometimes a little of the meaning seems to get lost, and occasionally I wanted to add a little more explanation. This is where I do it.

I hope you enjoy the next 10 tips – and remember to tweet @RememberToWater if you have any of your own tips you want to share.

Money Tips 11 to 20:

So these are the second ten tips explained. There is no real order to them; which is strange as there is normally order in most things I do. Ah well, you can’t win them all! These (along with all future ones) are all listed on the Money Tips Explained page if you are after more.

11. Use a balance transfer to pay off your credit card rather than for a break.
    • Many credit cards will give you a balance transfer rate of 0% for the first six months. Use this time to pay off your debt and to start saving for your emergency account to break the cycle. If you can’t pay it off in six months, give it a good shot. Try and find another 0% transfer and keep going. Make sure you reward yourself for your wins along the way, but preferably something with no (or minimal) financial outlay. Also make sure to have a larger celebration once the cards are paid off and you have your emergency account.
12. Use LED light bulbs. They use 10 times less electricity (costs more every day).
    • LED light bulbs may cost more upfront, but they last much longer and use a small fraction of the electricity. Not only will you be helping the planet, you will be helping your wallet. There is no need to rush out and buy heaps of them to replace everything at once. Rather, as bulbs need replacing choose an LED one. Just watch our for very cheap imported ones as they may not comply with Australian standards.
13. Have as few cars as you can afford. Do you really need a second car?
    • Do you really need a second car? Do you even need one car now that companies like Uber and GoGet exist. Even a regular Taxi once a month, rather than a second car, could save you a lot of money over a year. Cars are one of the worst things for a persons finance. However if you do need a car (or a second car) buy a good second-hand one and keep it for as long as you can.
14. Don’t be afraid of moving to a different higher interest online savings account.
    • Opening a new bank account used to be annoying. Now many can be done in a few minutes online – especially high interest online savings accounts. Shop around for better interest rates once every few months to see if you can find one. Just check that you can meet any requirements for the “bonus interest”.
15. Buy insurance for anything your emergency account can’t afford.
    • Having an emergency account is great for unexpected problems or bills. However larger events (a car crash, medical bills, or a house fire) could easily wipe out the your emergency account many times over. For any of these large events consider appropriate insurance to cover the costs. You can often decrease your premium by choosing a larger excess if you have enough in your emergency account to cover the larger excess.
16. Ask your bank to wave all fees on your home loan.
    • Banks typically have two types of fees on a home loan: those they charge you and those they pay to others. Ask your bank to wave all the fees, after all you are going to be paying them a lot of interest over the time they hold your loan. At the very least get them to wave the fees that are internal – every bank should be able to do that. Just make sure that you don’t cross off a smaller bank with a lower interest rate if they refuse to wave the fees. A small fee upfront may be better than a higher interest rate over a year or two, let along twenty or thirty – but you will have shopped around for a new loan before then anyway – right?
17. Aim to buy items at a supermarket rather than more expensive convenience stores.
    • Just like a captive market on a flight, a late night convenience store has a captive market – those who must have something now. As much as you can try to plan ahead and make enough time to buy items at a normal discount supermarket. On most items you will save 20-50%. Some cities have supermarkets open 24/7, some don’t, but it won’t take long to find the opening hours of your nearest one.
18. Only use coupons for items you would actually have bought.
    • A 50% discount on an item you were not going to buy still costs 100% more than you would have otherwise spent. Don’t let a good coupon entice you into a purchase that you would not otherwise have considered just because it is inexpensive now. I always think of Marge Simpson with this one – “Ooh, that’s a good price for twelve pounds of nutmeg.”
19. Give up or limit expensive habits like drinking, smoking, posh restaurants.
    • Everyone needs to have fun and I am not trying to say don’t drink. But if going out every Friday night for drinks is going to cost you $50+ each week, is it really worth it? It is a value judgement that you need to make for yourself. Just make sure you really know how much it is costing you when you make that decision.
20. Make your lunch at home (preferably in bulk) rather than eating out.
    • Even the cheapest lunch you can buy needs to allow for the cost of the staff salaries, the rent of the building/space and the profit of the store owns. If you are after a simple way to cut some costs, making lunches at home can save you a bunch. One strategy is to cook a big meal and then package and freeze it in lunch size portions. You could also consider a deep freeze.
21. Save at least 10% of your net income each pay – invest it.
    • Even with Australia increasing the required superannuation it is still not enough. Take responsibility for yourself and build your own nest. I consider 10% a minimum savings rate that everyone should achieve. So don’t let a 10% recommendation stop you from aiming for 20%, 30%, 50% or even more. If you save 50% of every pay, it means that at your current spending rate you can live for a year on those savings!

Well, that is it for the second ten. But there will be another ten #MoneyTips coming soon. And I have a confession to make – I didn’t manage to bring it with me today 🙁