debt lessons

Amanda's Note: this was provided by an online contact.

Throughout your life there are going to be times when you can spend big, or save big. By making the right choices you can decrease your debt or even live debt free. Here are the top 5 ways to make serious savings.

Budget everything

The top way to make serious savings is to budget everything and to know the ins and outs of your finances. By planning ahead you are better able to prepare for any unexpected costs and minimise the damage as well as save for your future.

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Don’t buy what you don’t need

First of all, after making sure you budget in everything and really getting to know your finances you should only buy what you need. Don’t impulse shop, instead, save for those items you really need or want, like a home, a car or a holiday. Don’t make the mistake of assuming just because something is on sale that it’s a good deal. Even if something is priced far cheaper than it should be, doesn’t mean you should jump on it. Simply buy what you need and your wallet will thank you.

Save on large expenses

While saving a little here and there by not buying that second cup of coffee or buying a cheaper brand at the supermarket is always a good idea, the fact is, it’s those big one off purchases that can really make the most impact on your finances. Buying a new car? Buy a used one instead to save yourself a huge amount over the lifetime of the vehicle. Cars are one of the most significant purchases we make over our lives and they’re also the one thing we buy that likely depreciates more than anything else. In fact, a new car depreciates by around 20% as soon as it’s driven off the dealer’s lot.

To rent or buy

When it comes to housing, one of the best financial decisions you can ever make is buying your own home. While renting can be cheaper over an initial period, if you are able to save enough to make an initial down payment on a home and put in as much as you can over the first few years of having a mortgage so as to significantly cut down the interest, you can save a lot of money over your lifetime. Of course, in some circumstances it’s not always going to be the better option so you’ll need to do your homework on the market you’re in first and take a look at your own finances in order to compare your options.

Don’t be a sucker

While loyalty is certainly a virtue, when it comes to your finances don’t rely on getting paid back for being loyal to your bank, insurer or any other financial institutions. Always do your homework and shop around before committing to your bank, loan, insurance or superannuation plan. Once you’ve chosen wisely you should always revisit and compare like-for-like institutions annually to make sure you’re still getting the best deal. Don’t be afraid to shop around and negotiate.