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Finances & Money Frugality

How I Saved $500 in a Month with Little Effort

By Vanessa

I earn good money, more than most of my friends (and family!) but as a consultant I work hard for it – I get inside my clients’ businesses, I help them with whatever they may need, I offer my advice, my contacts, my services and of course my time. I work late and on weekends and as a result my partner and I recently decided to reward alour hard work with a new car.

The Dream

I have always wanted an Alfa Romeo (probably because of my Italian background – who knows) and so my partner and I headed to the prestige car dealership. It was a gloomy Saturday afternoon and as a result we were the only customers, and were able to head out straight away on a test drive of the new 147, in red of course.

The Alfa was fast, it was smooth it was beautiful and because Alfa Romeo are not going to make the 147 anymore, we would have been able to lease a brand new one for just over $500 a month – perfecto! Or so we thought. When my partner and I looked at our situation – our earnings, minus our mortgage repayments, phone bills, power and water, $500 a month seemed like a drop in the ocean.

However, we soon realized we were in the situation that many of you are probably familiar with, of spending everything we earned and not being left with $5 at the end of the week, let alone $500 at the end of the month – when was the last time you saw $500 left in your bank account at the end of the month? How could this be – after our bills and mortgage repayments, a couple of transfers to our savings account (to pay for a trip to the home of the Alpha!) there was nowhere near enough left to cover repayments for a new car, month after month.

So with the end of the financial year approaching and the tax benefits (and the perks of a new set of European wheels in the driveway of our new home) slipping away we resolved to make our Alpha dream a reality. You see it is easy to spend everything you earn because you think you can – all the money in your account is there to be used, so your natural inclination is to spend without thinking until it runs out.

The Plan

That is where we realized our first hurdle. While we knew how much we earned, we knew what our bills were and how much our mortgage repayment would be, we didn’t know where our money was actually going because we had a static budget. You can’t expect to budget successfully by looking at your budget at the beginning of each month, or once every few months to see how much your bills are.

Instead you need to list all of your expenses for a month, as well as keep track of all of the incidentals. This means noting when you have a coffee on the way to work, when you go out to dinner with friends and including the cost of the meal as well as the cost of the fuel and the car parking. But you have to start with what you kngeow, so we went home and got out our list of bills where we had budgeted for $150 worth of groceries each week, a combined mobile bill of $100 (excellent capped plans!), our home phone and internet bill of $200, the $100 a week we were already contributing to a savings account and so on.

We then each took a notepad with us to record our incidental spending, but you can just collect the receipts as you go as well. Every couple of days we entered our spending into our new budget spreadsheet and before long we saw the spending add up. I had budgeted for $40 a month for a dinner with the girls (and a shared bottle of wine) but I was forgetting the $10 we spent on the traditional after-dinner coffee and ice cream. I also noticed I made sure to note the times of client meetings so I could raise an invoice, but I never noticed the $15 a week I’d spend at the drive through on the way home from the meeting when I was starving from a day on the road.

When my partner started adding up his morning coffee run he found he’d spend $5 every morning – plus the $5 coffee in the afternoon on a particularly long day. Then there was the run to the deli at lunch time for a $10 sandwich which quickly became $20 with the addition of a drink and a chocolate bar for the road.

We also found ourselves going consistently over budget at the supermarket too, spending an average of $200 a week, which added to the budget issue because we were spending so much on dinners out, deli lunches and junk food. So we decided to shop smarter, make our lunches, invest in travel mugs and buy healthy snacks at the supermarket which could see us through hunger cravings. I also decided I didn’t need the extra sugar after dinner, and I’d probably sleep better without a late night coffee with the girls.

The Savings

We saved:

  • $10 a month on an after dinner treat.
  • $15 a week on the drive through = $60 a month.
  • $10 a day on coffees = $200 a month.
  • $20 a day on lunches = $400 a month.
  • $50 a week on groceries = $200 a month.

So that was a saving of $870 a month we could make simply by being a little more organised with our meals. I still got to enjoy dinner with the girls and my partner still had his morning coffee – he just made it at home before he left for work.

As the bills started coming in we saw where the next big portion of our wages was going. Our mobile phones were on capped contracts which should have cost us $100 a month combined. However, when we looked at why we were actually paying $200 a month we saw that my partner consistently went over his capped hours and into the talk time which was charged at a higher rate, my mobile was skyrocketing because I was addicted to the connectivity of my smart phone. So my partner starter monitoring his mobile spend and when he approached his capped limit, he would use my phone as I hardly ever used up all of my capped time. I also cut back on my Facebook mobile use and logged in only when I was in front of the computer.

Unfortunately our home phone package was more than it should have been and we found we were paying around $250 a month. When we looked at that bill the extra charges were made up of mobile calls we’d made from the landline and so we resolved to use our mobiles (on which calls to other mobiles were included).

So we saved another $150 a month, bringing our savings up to more than $1,000 – more than enough for a new car, plus fuel, registration and a little more for the holiday fund. However, as we continued to track our spending we saw our grocery bills stay steady at around $200 a week. While we went shopping with a list and didn’t buy things we didn’t need, we were spending more on snacks and lunch ingredients. However, the $200 more we spent on groceries was still less than the $600 we had been spending on getting lunch at work, so our monthly savings were still a healthy $820 a month.

As you probably also know, it can be hard to resist a shopping splurge and I saw myself entering $50 for a new scarf one week, $200 for a new pair of patent leather shoes, another $50 for a cute top and $500 for a gorgeous red laptop bag. If it’s not scarves and shoes and bags it’s going to be something else but this budgeting trial was all about saving without really having to try, so there is no need to cut out all retail therapy, just plan a little first. If I’d looked, I would have seen we already have three unused laptop bags in our office, and while they’re not red, they are going to do the job, in the same way the new top does the job of the three other tops I already had in the same color. However, if you know what’s in your wardrobe, you can more clearly see the gaps and make fewer purchases, but ones which are just as satisfying.

Learning to ‘shop your wardrobe’ gives you a chance to rediscover items you had forgotten you had, or which you now fit into again, and pin point the items which actually need to be replaced. So you can still budget for $100 or $200 a month for clothes and save $500 a month by buying only things you really need.

For those of you keeping score, yes we’re now up to a saving of $1,200 a month and I don’t miss the ice cream or the monthly influx of new shoes because I now have a gorgeous red accessory in my driveway permanently, as well as a more structured and realistic savings plan, not to mention a healthier diet.

Vanessa is a personal finance writer at Home Loan Finder, where she offers tips and advice on how to choose the best first home buyer home loans

About the author

Clever Dude


  • Bills really add up. If you take into account everything we pay for and how much income we have things really do add up. If you also factor in stuff like car repairs, inconvenient bills, you really don’t have have to much room to spend on other things

  • I just found Clever Dude a few weeks ago and quickly signed up. I loved his message of “The “Dude” writes about his mistakes in finances and marriage in hopes that you, the reader, can learn just a few nuggets of wisdom and maybe prevent the same mistakes. “, quiet refreshing and thoughtful. However, I find this guest posting very troubling and not at all in keeping with the goal of the Clever Dude. I am in complete agreement Klip. I find it hard to believe the person that wrote this piece “offers tips and advice on how to choose the best first home buyer home loans”. If you are a consultant then you must pay for your own health care. How is your savings for just your health care? You are self employed there fore do you have a savings account strictly for paying your income tax? Do you have any credit card debt? Student loans? Do you have at least 2 years emergency saving because consultanting contracts can be very fleeting especially in these economic times? I guess these questions are not relative because after all like you said, ” I now have a gorgeous red accessory in my driveway permanently …”.

  • Everyone has its own needs and dream, but at the end of the day you are saving money to spend it on other things, whatever they are. You might want to save for holiday, a car or to repay your debt, but this money will be spent somehow.
    What I found interesting in this post is the saving method and process rather than the goal itself.

  • Thanks for your comments. I do appreciate that saving for a car is not everyone’s taste, but I thought I would just describe the process I followed to save money on cutting off my daily expenses.
    @Kilp, @AG: Your points make a lot of sense and this debate could be expanded further. I do believe that saving money is in fact just a budget shift.
    @Tracy: You are totally right. Car with petrol, insurance and repair can be really expensive and adds up.
    @Cam: Thanks for your constructive feedback. I am sorry if I did not include all these details, but this post is a just an example of saving for a specific item not an entire analysis of my budget. This could however be covered in another post. The elements you have outlined are obviously already factored in my budget. Fortunately I do not have Credit Card Debt, nor Student Loan repayment. I do allocate money for health care on monthly basis from my contracts payment and do have an income protection insurance for the hard times. Regarding the emergency fund, I am not a strong believer, but I do have safety saving account

  • You saved the money that your earned. Only you should decide how to spend it. The car was a budgeted item. If its in the budget its allowed. Was the complexity of the accounting of all you spent a pain or fun?

  • Keeping track of your expenditures is an old frugal trick. Just read Amy D’s books “The Tightwad Gazette 1, 2, & 3.”
    All anyone who wonders where their money is going, have to do is do the same as the author of this article and keep track of every single penny spent for a month.
    The author of this article was able to use her money already earned to pay for her dream car. I see nothing wrong with that because she made it a budgeted item.

  • I am totally for saving in some areas, and spending in others. If you can do the things you really want and buy the cars/etc – great! But only if you’re cutting back in other places too. It’s when you max out your spending in ALL areas that get you in trouble. All about prioritizing 🙂

  • I, too, fall in the camp of prioritizing. I’m pretty sure almost (if not) everyone has items in their budget that others consider “wasteful.”

    I’m not a fan of leasing cars, with “found” money or otherwise. But you do make good points about finding money in your budget and tracking spending to direct in other directions. Readers can certainly apply the same numbers/methods and replace “leasing a car” with “paying down debt,” “saving for college/retirement/a house,” or “my turning waste into $1,000,000.”

  • Income protection insurance for the hard times. Hmm. The premium for income protection insurance to replace $5,000 of monthly earnings is anywhere from $500 to $650 a year. Why not just pay yourself monthly this amount and put this money into a high interest earning checking account like a money market account or a CD that matures every six months allowing the money to be quickly available to you instead of paying this premium to a insurance company? It is one less check to write each month or account transfer (however you pay your bills) and you have more control of your money and not some insurance company. Much smarter way to go.

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