Two tips to save money when you're really really bad at it.

There was a time a few years back where I was a single mum, studying full time and working as a full time musician and living in Surry Hills.  

Our shoebox studio apartment was, by the time I left, $400 a week. Previously when I was paying off my mortgage (which was actually less than that)  I didn’t get assistance for that but if you are renting as a single parent and you are a low income earner you will get some form of rent assistance.   At one point I got really sick and lost my voice and as a working singer-songwriter that meant that I was in serious trouble.  No savings, no rainy-day fund, no stash of cash under the mattress and no way out of a tricky situation.

Because I really didn’t know any better at the time, I ended up getting a loan to pay my loan (and the interest rate was somewhere along the lines of 27% - basically designed for me to never be able to pay that off).  After this whole experience I ended up putting in a few “safe guards” to ensure that in the future if I got sick I wouldn’t be left so vulnerable that I had to make a deal with the devil (and believe me a lot of those finance companies that give you money so easily are exactly that). 

I want to share a few of the things that I did because if you are struggling financially there is a good chance that savings are not something that you have and while I am in no way saying this is the best option I am saying this was the best option for me (and for a couple of reasons which I will explain).  

So first up, an admission of guilt; I was (and mostly still am) completely hopeless with money. If I had it, I would spend it and then it would be gone. Inevitably a bill would come in and I would shit my pants thinking how was I going to pay it AND get groceries or have any cash left over.  I realised that in order to have a back up plan I would need to get in front and in order to get in front I needed a plan.

Now if you have amazing self restraint and are super good with money you will have a different approach perhaps. However, if that is you then this really already doesn’t apply.  If you are crap with funds and you don’t have incredible self discipline then this plan of attack could possibly be your “saving grace” (see what I did there?).  I know it was definitely mine. 

So what I ended up doing was, I took a look at some of my previous bills (ok, all of them actually) and what I did was divided them over a time period. For example let’s say my phone bill was $90 a month. I would times that by 12 (months) and divide by 52 (weeks) to work out my exact weekly cost. Then I would add $5 to that amount. So in that case it worked out that I would be paying $20 plus the $5, so I would direct debit $25 out of my pay straight into the phone bill.  You can set that up so that it comes out automatically - then you don’t even have to think about it or consciously move money around.  I did that will all of the bills.  Rent, electricity, phone, and eventually I began to get well and truly in front.  This meant that if I was to get sick, I would have a buffer that meant I could not work for a month and my bills were still taken care of.  If you’re amazing with money, it makes sense to run the same thing but out of a bank account that has an interest rate but if you’re not this actually means you can’t get your hands on the buffer amount so you won’t spend it if you see a shiny new pair of shoes or you get hungry for Macca’s one afternoon.  You just can’t do it so you won’t.  Simple. 

Another way that I use (which I still use) to save money is using an app called ‘Raiz’.  What it does is every time I spend any money on my keycard, it takes a dollar or two (you can set your own amount) and adds it into my Raiz account.  I never notice the small amounts being squirrelled away but it adds up over time.  I also put $25 a week on top as a direct deposit into the Raiz account.  Raiz then invests the money in different ways (you can check that out for yourself) but so far for me it has worked out to be a better return than the small amount that a long term bank account offers but with the added bonus of the fact that I can’t access the funds immediately.  No matter what happens it takes three days at least for the funds to come out of Raiz and into my bank account.  So there’s no temptation for me to impulse buy with my savings.  Plus, if I delete the app I can’t even see how much is being squirrelled away and am then not tempted at all.  I have found it super awesome for me (I am still very compulsive when it comes to spending) so it allows me to really circumvent my own weaknesses there.  The other awesome thing that Raiz does is that it gives you $ for shopping you do online.  Now in the past some people have said ‘if you’re saving money, then it doesn’t make sense to spend more money’. I do get that but at the end of the day, we spend money all the time even if we are saving, but if you use Raiz when you shop online you get extra money squirrelled away.  Like for example if you do your Woolworths shopping online they will invest 1.75% of your purchase back into your Raiz account.  It’s free monies!  If you’re smart about it, you can look at the ever-expanding list of rewards providers and you’ll see all sorts from Telstra (hello $50 when you sign up for your new plan that you were signing up for anyway), and rewards from UberEats and Dan Murphys puts 2.8% of your purchase back into your Raiz account.  If you do ANY shopping on line it is worth looking into (even Virgin put $ from your flight tickets back in).  Like I said, we spend to live, so why not make some $ while you do it?  Anyways now that I sound like I’m sprucing (I am because I genuinely think this is an amazing program), I’ll also tell you that for this month they are doubling their referral dollars.  So if you sign up, I get $5 AND YOU get $5.  I don’t ever recommend things for the sake of being paid for it.  I either believe in it or I don’t and I really can’t be bought in that way but for transparency’s sake you should know that if you use my link that will pay money into my Raiz account.   Even if you don’t want to use my link - I STILL recommend Raiz as a way to save as if you’re anything like me it is a work around for being bad with money.  

I hope this post has helped.  I wish someone had told me this stuff when I was first starting out (and before I got that ridiculous loan). Of course there are a million ways to do this stuff and this is just how I did it - but at the end of the day, I did it.

Here’s my link if you want to try it out.