Family finance tips to save this new year

Imagine if you were suddenly unemployed … would your family have emergency funds available to stay afloat? Saving is a constant challenge for many Australians, with many describing themselves as an “average” or “terrible” saver.

Along with safety nets such as income protection insurance, personal savings may help shelter your family from financial grey days too. Often the easiest way to kick off a new goal is to start with small wins, which is what the following ideas are all about. With some minor tweaks to your lifestyle and way of thinking, you may be able to start saving today.

Be strategic with your pay packet

According to Australia’s best-selling book in 20171, Scott Pape’s The Barefoot Investor, the way you slice up your pay packet plays a significant role in helping you save. He suggests living off 60 per cent of your take-home pay, using it to cover everyday household needs such as food, rent/mortgage, gas bills, Netflix, etc. 10 per cent of your pay is then used for “splurging” (cappuccinos, smashed avo, shoes, beer etc.), and another 10 per cent is used for “smiling”; an online savings account for big goals that take a while to save for (holidays, weddings, renovations etc.).

The final 20 per cent of your pay packet should go into your “Fire Extinguisher” account – an online savings account he says you’re going to use to put out financial fires such as credit card debt, your home deposit, and whatever else may unexpectedly pop up at different times throughout your life.2

Baby Boomers are the most likely to cite lack of money (62.1%) as their greatest barrier to saving, while Gen Ys say lack of discipline is their biggest obstacle to regularly saving (31.9%).3

Take the emotion out of shopping

Keep impulse buying in check by giving yourself a day after deciding to buy a non-essential to really think about it. This is one tip television presenter and finance journalist David Koch says will help you save, because more often than not you’ll decide not to go through with the transaction.4

Koch also suggests thinking seasonal when it comes to snagging a deal on big-ticket items. You’ll often find the price of refrigerators goes down when the weather does, and save anywhere from $50–$200? on heaters during summer. And when you’re ready to upgrade items at home, consider trading them on second-hand markets such as Gumtree and eBay to save and declutter all at the same time.

Grocery shop once a week without the kids. Eliminating curious/cranky kids from the equation may help prevent impulse buying and provide time to search for the best deals.

Motivate yourself with hacks

Aussies are turning to creative ways to save when it comes to making every dollar count. These are their top “hacks” for making it happen regularly:

• Focusing on goals i.e. what you’ll spend your savings on (74.1%)
• Applying auto direct debit to savings account (38.7%)
• Using savings applications to track and monitor accounts (24.2%)
• Partnering with someone to commit to goals (13.6 %)
• Making it a competition with family or friends (6.1%)

In addition to direct debits and goal visualisation, you may like to try some easy favourites such as throwing all your gold coins in a savings jar when you get home from work every day, or swap a sit-down meal with friends for a wander through the free exhibitions at your local museum together.

Males are more likely to live day to day and never worry about savings or debt (20.6% vs. 10.8%).3

Take a holiday without leaving home

Affordability is the biggest plus when it comes to “staycations”. There are no hotels and flights to book, just ample opportunity to discover new activities and adventures right under your nose. According to a recent report5, staycations are gaining popularity as Aussie parents realise they’re a less expensive way to enjoy quality family time, and experience something new.

Need a break from the kids? Instead of spending date night at a restaurant, have someone pick the kids up while you enjoy an affordable and easy meal at home.

Get smart about school expenses

As one of your biggest family expenses, finding a way to save when it comes to sending the kids off to school is always a welcome feat. Consider putting aside 5–10 per cent of your income every month before they even start to get ahead. You may also want to consider education funds to see if they’re the right fit for your financial plan. These special funds help you save for children’s education, but you should always familiarise yourself with their fees, contributions, access to funds, and investment options to make sure they’re right for you.4

Uniform rules

Put your child’s name on everything! If uniforms or stationery are misplaced at school, you have a better chance of them returning if there’s an obvious owner to them. Take advantage of second-hand uniforms made available through the school or don’t hesitate to get chatting to other parents with kids attending who may be wanting to off-load uniforms that have been outgrown.

How do you manage your money?

More than two in five (43.6%) respondents say they follow a budget, save regularly and rarely go into debt. But similar proportions say they don’t really save at all, and worry they won’t have enough to live on (21.6%) or they’ve thought about following a budget to save, but have never gotten around to it.

Savings can go a long way when it comes to protecting your family’s financial future. But it’s easier said than done to get the money locked away amid the everyday expenses. That’s why a few hacks and smart ideas can be the motivation you need to get started.

Along with a healthy saving plan, income protection insurance may help cover your family’s expenses and bills if you find yourself unable to work due to sickness or injury. Learn more about income protection insurance with Yes Insurance Solutions.