As the cost of living rises, people are so stressed about money they can't see the forest for the trees, says financial advisor Lisa Dudson.
The first step towards spending less is to pause and check in with yourself each time you make an individual purchase, she tells Kathryn Ryan.
"Is this the best use of my hard-earned dollars or can I spend it a bit more wisely somewhere else?"
Photo: Kelly Sikkema / Unsplash
Lisa Dudson owns the financial advice company Acumen and has written several books including Good with Money. Her advice is of a general nature.
"But I really need that" is a frequent plea from Dudson's clients about their purchases. Her response is 'Do you…?'
"Is it an absolute essential or is there another way that you can get something similar that's going to feed that so-called need?"
She recommends people take time to list the purchases that aren't essential to survival but that they think are needful – then rank them by importance.
While missing out on things that are truly important to you can be painful, there may be things you're buying that you wouldn't even miss much, she says.
Doing a little online research to source what you need from a wholesaler or discount retailer may be worth the effort, Dudson says.
"There's always a trade-off with these things – you either pay more in dollars or you pay more in time."
TradeMe outlets have some great deals on food products, for example, the protein bar she eats is available for half-price there.
Part of cutting costs is getting "food smart", she says, by:
- Buying budget brands at the supermarket
- Taking lunch to work
- Cutting down on takeaways
- Buying in bulk and cooking meals in bulk to freeze
Dudson also recommends the supermarket shopping tips on the TVNZ show Eat Well for Less New Zealand and their recipe collection.
Dudson recommends people occasionally challenge themselves to just buy "fresh stuff" and make meals with whatever food is already in the house until the cupboards and the freezer are bare.
"How many of us have got stuff in the freezer that's been there for a while, ten cans of tomatoes… If you do [a freezer and cupboard challenge] a couple of times a year you might save a couple of hundred bucks a time."
Exchanging services with neighbours – such as minding kids in return for lawnmowing – can be another potential way to save a bit of money, Dudson says.
To earn a little extra, could you sell some unwanted stuff on TradeMe, offer your time on neighbourhood noticeboards or make preserves to sell? Maybe you have a room that could be rented out to a student or a parking space you could be getting some money for.
Also, if you have the time and energy, Dudson recommends checking out whether any local businesses are short-staffed and have a few hours extra work you could pick up.
"All the little things can add up to a surprising amount of money over a period of time."
To explore other cost-saving ideas, chatting to family members and friends about how they're doing things differently could also be worth your time.
"It's good to sit with your friends and your partner and brainstorm ideas. There are lots of little things that might only bring in twenty bucks here and there but that all adds up in these tough times."
Related:
Eating well on a tight budget: helpful tips from a nutritionist
