Jade asked me on Facebook “I’m interested in your opinion on what things we could spend money on to save money longer term“. Many Australians will be receiving a tax return soon, or already have. A lump sum like this, if used wisely can really help improve your financial situation. There are the usual things like paying off credit cards, personal loans or throwing it at the mortgage if you own your home. Another option is to spend it on things that will save you money. I have discussed the importance of buying quality before and if you have some items that you constantly have to replace because you can only ever afford the cheap version, use your tax return to get the good quality version, it will work out cheaper in the long run than constantly replacing the cheap version.
If you have debt, personally, I would split your tax return – put most of the money on the debt, but put some aside to spend on things that will save you money.
So what can you spend on to save you money?
There are some little things that can make a big difference to things like your electricity bill, groceries etc.
- Draught stoppers: You can get the fabric ones filled with sand to put at the bottom of doors or you can get ones you screw onto the bottom of your doors to stop draughts. This helps reduce your electricity bills. You can also get tape you put around doorways and windowsills which block gaps and is not noticeable. You can get these for under $10.
- Power boards: You can get ones which have a master switch so if you have for example, your TV plugged in and switch it off, everything else plugged into the power board automatically switches off such as your DVD, Foxtel etc.
- Water saving showerhead: These can be changed yourself and bought at your local hardware store.
- A fruit tree, some seeds etc.: If you have somewhere to plant them, getting seeds, a fruit tree or seedlings can save you money if you can keep them alive. It needn’t be a garden bed either. You can plant them in pots, grow herbs on windowsills and so on.
- Solar cooker: They can be bought or made relatively cheaply and are a way to cook your food for free once you have what you need. I’ve seen kits on eBay for under $50, or instructions on how to make your own from a windscreen shade. It does take longer to cook this way, but the results are good.
$50 – $500
If you have more than a few dollars, which you want to spend on things that will save you money, you could:
- Get your car serviced: If you don’t get your car services regularly, you could end up with very expensive repairs on your hands, not to mention the danger you could be putting yourself and others in. Getting your car services regularly will see it running more efficiently, so saving you on fuel; minor repairs will be picked up before they become major repairs and it helps ensure a higher resell value, especially if you keep a log book.
- Buy a 2nd freezer: It will help you buy things like meat in bulk, stock up on items when they are reduced to clear and help reduce your grocery bill. Make sure you buy an energy efficient one, the size to suit your family and keep it stocked, not empty.
- Set up a bulk buying account: A bulk buying account is basically an account you use to buy items on sale in bulk. You replenish the money with the savings on your groceries each week. It is a way of ensuring you always have money to buy in bulk.
- Chickens: If you own your own home, you might want to get some chickens. It is debatable if they will save you money, but if you are already buying organic/free range eggs, then having your own chooks will save you money.
- Block out curtains: They keep your home cool in summer and keep the heat in throughout winter.
- Sewing machine: If you can sew, a sewing machine can save you money by enabling you to mend clothing, sew things yourself and make presents for others.
- A DIY class: Is there something you want to know how to do, maybe sewing/basic plumbing/woodwork etc. Classes can be done through community colleges and teach you skills which will save you money at home.
- Small home repairs: Do you have leaking taps? A tile on your roof which needs replacing? Things like this if left can cost more, so use a little bit of money to get them repaired now.
- Get a will: If you don’t have one, get one. It won’t save you money, but it will help your loved ones should you pass away.
- Insurance: Insurances such as life and health are ones many people don’t have, but you really should have them. Some policies will cost more than $500, others less. Shop around, find what suits you and get them.
- Good quality shoes/clothes/anything: Items like winter jackets and boots go on sale now. Adults sizes don’t generally change much from year to year. Use some of your refund to buy some good quality, classic items at discount prices.
We’re talking bigger investments now, but bigger investments see bigger returns.
- Water tanks: They come in all different shapes and sizes. Collecting the water and using it even just in the laundry or toilet will reduce your water bill.
- Solar panels: Some people think they save, others think they are a waste of money. Do the research for the area you live in to weigh up cost vs benefit.
- Convert to gas: If you plan on staying in your home for a long time, it could be worthwhile getting gas heating, gas hot water etc. A big gas heater only costs 40cents an hour to run whereas large electric heaters are usually $1 – $2. Same goes for your car. If you plan on keeping your car for a long time you might want to weigh up the pros and cons of converting to gas.
- Replace energy guzzling appliances: Some appliances such as old air conditioners are very costly to run. Replacing them with an energy efficient air conditioner can halve your cooling bill in summer.
- Annual bills: Things like land rates, car insurance, house insurance etc can be paid annually and you often get a discount if you pay the bill in one lump sum instead of monthly. Look into the ones which will save you money and switch how you pay them
There are so many things you can spend money on to save money. It all depends on how much you have to spend and what will really save you money – everyone’s situation is different. What saves Joe thousands might only save Meg hundreds due to differing circumstances, so do your own research.
What have you spent money on to save money long term?