If you haven't been hiding under a rock, you'll have more than likely read a headline about a recession coming. Unfortunately, to me, it seems like those headlines could well be correct. I'm not going to go into detail today on why that's the case, instead, let's look at some money-saving tips that could help us out if a recession arrives (or heck, even if there isn't a recession).
I reached out to my friends on Facebook, asking them for their money-saving tips in an attempt to gather wisdom from many. Thank you to everyone who participated. Now, the first thing you need to do is take a moment to read this post, flicking through is the wrong attitude when it comes to saving money, go slowly, make some notes and get into the zone.
Let's dive into this and see what we can do!
It really is of no surprise that food came up multiple times. The cost of food has exploded and most households are reviewing how they approach their groceries. Of the tips, many people spoke of meal preparation, careful shopping around, and ordering fewer takeaways. Spending a few hours a week planning can save you a good 20-40%, make a habit out of doing this and it'll stand you in a great money-saving position. When it comes to takeaways, a few people spoke about ordering directly from restaurants rather than using Uber, for example, because of the markup. This is a great tip, I've noticed that Uber's markup is really high!
Another great way to save money is to pack yourself a lunch for work rather than turning to the canteen or a shop for on-the-fly food. It's always cheaper to pack yourself, and you can make healthier decisions as well. Brew your coffee at home, takeaway coffee is frightfully expensive.
When last did you review your insurance? Give your car insurance broker a call, insurance is increased yearly against your depreciating asset, look for a cheaper rate, and shop around, you'll be surprised what you can find if you put the time in. How about your medical aid, life cover, and so forth? When last did you even speak with your broker? Put some time aside and review all of this, I do it yearly and if I calculate my savings over the last 10-15 years, it's frightening how much I've saved and all from a handful of phone calls.
I'm a firm believer in not cutting out all entertainment, we have to live and do things that make us smile with friends but there are areas we can focus on some adjustments. How many streaming services do you subscribe to? Netflix, Hulu, Disney+? Perhaps it's time to cut one or two out of the equation and focus on only one. Whilst looking at these, check-in on other subscription services - I like to print out 2-3 months of bank statements and look through them for all the repeat monthly costs. In doing so, I can make a list of my monthly debit orders and review them. I did this when the pandemic started and I was a bit shocked at how many I was able to cancel.
Another excellent suggestion was to get into exercise and I couldn't agree more. Go for a jog or a cycle, not only is it physically healthy but it will assist with your mental health which is absolutely crucial during hard times. Although this doesn't impact your finances directly, it certainly will assist in having a clear mind which helps in making wise financial decisions.
I'm terrible at this one, I buy too many clothes, gadgets, and stuff. Not too long ago when our friends moved to Canada, Ian told me he stood in his house and looked around, deciding what items were crucial to go with. He was really surprised at how little was crucial. I did this exercise shortly after that out of interest, I asked myself, "What can't I live with?" and I got a shock at how little I would actually need. We seem to have this tendency to buy things we don't need, to fill up space! Now would be a really good time to adjust that. How about buying things second-hand? Not only will that save you money, but it's great for the environment.
Don't forget to revisit your stance on specials. A buy one get one free or a 25% off deal isn't necessarily a reason to make the purchase, get into the habit of asking yourself whether you really need it or not. If something is 25% off, you're still spending 75% 😉
Perhaps it's time to review your electricity usage. We all know that electricity is a global issue and we need to conserve it as much as we can. Do you have multiple geysers, consider turning one-off - We did this, we had a plumber come to assist in changing a few things to allow us to turn a geyser off and this has definitely made a difference. What about solar power for the geyser or even a heating blanket? Simple things such as only putting enough water in the kettle rather than filling it up completely, or when you shower, try to stick to a 4-minute shower rather than 15 - you'll save water too which is never frowned upon. Own a pool? Airconditioners? Review your usage, install a timer. I was also told that any appliance with a clock, one should turn it off at the switch - that makes a lot of sense.
It's probably time to relook at your debt and spend some time consolidating it. I appreciate that going into a recession and having less disposable income makes this hard but there's still time now. Print out the accounts you have debt with, isolate the ones with the highest interest rate and see what you can do about paying them down a bit. Perhaps you'll have to sell something to get extra money to do this, it will be worth it even though it might not feel like it. Interest on debt is a killer, especially during any financial pinch.
This one isn't a typical money-saving tip but in this digital age, it's really important. When you receive emails (newsletters) from retailers, unsubscribe from them. You can always subscribe later but these retailers pay a huge amount of money to digital marketers to make them as tempting as possible. By unsubscribing, you remove that temptation from your life. Just think about that for a moment! On the same topic, how about browsing the world wide web in Incognito so that companies cannot retarget you with their clever urgency advertising!
Are you keeping a budget? If you're trying to cut back on costs, it's absolutely crucial that you keep a budget and understand where your money is going. If you need a hand, you're welcome to download my free expense tracker, which really will assist you. I used this expense tracker for many years and it played a big role in helping me manage my money.
Birthdays happen, there's nothing we can do about it and it's amazing to celebrate someone. However, birthday gifts are expensive, spend some time on YouTube, there are thousands of videos on how to DIY amazing things, get creative, and make a gift. Honestly, receiving something that's made is often far more heart-warming than receiving something purchased at a shop. I love indoor plants, so I propagate plants and gift them. Oh, and cards, cards cost a small fortune, make one!
Something I've done for a long time, and work hard at, is avoiding impulse purchases. I've spoken about this before on 100mpm, the world wide web has made it really easy to purchase things online so what I do is add items to my cart, I then sleep on it and review the cart the next day. So often I find myself removing items from the cart when I recognise that they're not essential or were a momentary interest thing. You should give this a try if you shop online, you'll be surprised how much our mood influences our wants.
During difficult times, a lot of people like to get away, and I understand why but getting away can be expensive so why not have a staycation. The secret to staycations, in my opinion, is to plan for them so as to differentiate them from just being home. Plan out some activities you've wanted to do, whether that's a walk, a hike, a visit to the beach, or perhaps a board game, the options are endless but if you don't plan, it won't feel any different and that's what most people get wrong. Map out the staycation as you would a vacation, it can be a lot of fun!
We all know that fuel is absolutely crazy at the moment, it's time to take this more seriously, if you aren't already. Are you able to cycle to work instead of going in the car? What about sharing a ride with someone else? Are you able to adjust your schedule so that you're not driving in a lot of traffic? Perhaps it's time to downgrade your vehicle to one that uses less fuel - it sucks having to do that but sometimes we have to make sacrifices. I'm working remotely at the moment which has reduced my travel a great deal and the saving on fuel has been enormous - I try to do fewer trips these days too by planning better. This is great for our environment too!
Perhaps it's hard for you to manage your money, you definitely wouldn't be the only one. Why not get a few friends together and turn it into a game/challenge. Come up with a challenge and then hold each other accountable. We know how powerful this is for weight loss or exercise, so why not adopt the same approach to saving money. The person who manages to save the most could win something small! Don't underestimate the power of joining forces with others, the support can be incredible.
As the end of the year starts to come into sight, those fortunate enough to receive a bonus at the end need to look at banking the bonus rather than spending it. Okay, perhaps 80/20 or something in favour of saving. We need to treat ourselves but we also need to be careful about spending so investing a sizeable portion of the bonus would be a wise thing to do. In fact, as painful as it might be, using the bonus to pay down debts is probably the best thing you could do. Sorry, I know that sucks!
I'm not the best person to talk about rewards cards because it's not a mechanism that I actively use. However, when it comes to difficult times, these cards can really assist. Whether it's discounts on certain items or free points to purchase things, take the time to check your cards, you might have something saved up or there might be a special that could assist you.
Purchasing in bulk can most certainly save you money, whether you're purchasing toilet paper or kitchen supplies when there's a discount offer can save you money. There are a number of things that you'll always need and that don't expire, stock up on them if you get a discount by buying in bulk, or wait for a special and then scoop up a lot.
What about spending some time outdoors and enjoying planting a vegetable garden? I've seen a number of people doing this and watching them harvest their vegetables is so awesome. I haven't done a vegetable garden myself but my father had a really good one and there was something special about eating one's own vegetables. I love the combination of saving money but also spending some time outdoors - what a great activity to do with the kids!
Another entertainment option, join a library! Gosh, it's as though libraries have left us due to the world wide web don't you think? I've never been much of a reader but I appreciate the attraction and remember going as a child. In fact, I remember when the library offered VHS tapes of National Geographic, which was incredibly exciting, I can still remember the excitement. So, if you're looking for another way to fill entertainment, this is a great option, just remember to return on time so you don't pay a fine! 😉
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One of the best comments I read from someone was, "Act your wage" and I think that's such a fantastic saying. We all know we need to spend less than we get, and this saying speaks to exactly that. Hat tip Ollie.
I think to end off, I'll reiterate that markets do go up and down. History shows that when they go down, they do recover and go up again but at the end of the day, when it comes to saving money, this isn't something that should be inspired by recessions, it should be something we always do. If you're not saving for recession purposes, you should be saving for investment purposes. Finding ways to save money will always be applicable and the sooner we create a habit out of that, the sooner we put ourselves on a path to greater success.
Do you have a money-saving tip? Please pop it into the comments below!