5 Ideas to Save Money without Effort

5 Ideas to Save Money without Effort
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5 Easy Ways to Save Money without EffortThe inspiration for this post came to me when we were cleaning our dirty oven. Cleaning an oven is never a nice task, but when you’re experimenting with recipes for the best crispy pork crackling, cleaning becomes an industrial job!

We knew that it wasn’t going to be an easy task to get our oven sparkling again, so we went out and bought the strongest oven cleaning product we could find. However, despite chemicals corrosive enough to dissolve skin and cause blindness, it barely removed any of the dirt from our oven walls!

And that was despite exceeding the permissable soaking period, multiple applications, and intensive scrubbing. After we tried several of the market leading products, we decided to ask Google for an answer.

We were surprised to find that the most effective “product” was baking soda. However, we had nothing to lose, so we gave it a go. We mixed the baking soda into a paste using a little bit of water and applied it to the oven walls. After a few minutes, we wiped over the oven with a sponge (some scrubbing was required, but nowhere near the Herculean effort we had invested with the industrial strength cleaning products), and it was sparkling clean. The grease was gone!

Then we used a little bit of vinegar to remove the residual baking powder and – voila – a sparkling clean oven. We couldn’t believe how easy it was to clean the oven using these simple household ingredients! And the best part was that it cost barely any money, has no harsh odours, and minimal environmental impact.

This made us begin to think outside of the box, ignore marketing trends, and start looking at what actually works and what doesn’t. So, since the “oven cleaning incident”, we’ve been looking for better alternatives to the products or services we use daily, both in terms of efficiency and cost.

Below are 5 easy ways to save money. While each of them separately may do little to dent your household budget, applying several of them is going to make impact. And, of course, we shouldn’t forget to think about the longer-term savings (e.g. 10 years, 20 years) in light of compound interest. Critically, the 5 lifestyle changes outlined below require minimal effort, so there is no reason not to implement them.

1. Use bar soap

For some reason, the norm nowadays is to use shower gel and liquid hand wash. We also did that until very recently – But then we started thinking about the economic and environmental cost associated with such habits. It used to cost $5 a week for both of us to use these products; that’s $260 over the course of a year.

One day, my wife complained to me that I was using too much shower gel. Part of the problem with the convenient dispension method is that you tend to use more of the product. I was doing just that. I applied the shower gel liberally, often literally letting it run down the drain.

I started to think of alternatives and came up with the idea to trying to go back to regular soap. We made the switch and haven’t looked back since. We now buy 10 brand name soap bars with a nice fragrance and made for sensitive skin care for about $5. Those 10 bars last more than 6 months, equating to yearly savings of $250. And we also produce far less plastic household trash.

Looking back, I have no idea why we thought we need to use these liquid soaps. Regular bar soap cleans and smells just as well. Sometimes people worry about dry skin, but despite my wife having sensitive skin, we haven’t experienced any adverse effects. In fact, there has been absolutely no observable difference since we switched to using soap bars.

You may think that saving $250 per year isn’t a lot of money. Maybe it isn’t. But the question you should ask yourself is: Why spend more money if you can have the same effect for less? We’re starting to think that it’s all a marketing ploy. Indeed, a US health watchdog has recently warned against using popular antibacterial handwash.

So think about whether you can make the trade. This is one example of many about how you can reassess your everyday consumption in order to save money without effort and discomfort.

2. Cut your own hair

While I didn’t initially set out to start cutting my own hair for financial reasons, I did it because I had a baby and found it harder to steal time away to go the hairdresser. I now recommend it to everyone.

I used to enjoy going to the hairdresser to get pampered with a shampoo, head massage, cutting and styling. It cost me $30 every month, which means $360 a year. Like with any hairdresser, I could watch the whole process in the mirror. 80% of the time, the stylist was just using a clipper to shave the sides and the back. Eventually, s/he would use scissors to even and thin my hair out. It looked pretty easy and it actually is if you have a simple hairstyle!

About 6 months ago I bought my own hair clipper and some hair scissors. I cut my hair using a mirror and my wife helps me with the back. I was nervous at first – I would have liked to have practiced on someone else first… – But in the end no one noticed a difference in my hairstyle. At least no one made fun of me at work, which they would, so it must have gone well!

Of course, I did some research before taking the step to cut my own hair, and so chose a professional brand known for reliability and efficiency. The clipper is a Wahl model made in the USA. Pay attention to reviews when you make your purchase, as there are many ‘low end’ models offered that are made in China and are of significantly lower quality.

I spent around $90 upfront for a set of clippers, which I expect to last me at least 5 years. In that time I will be saving $250 the first year and $360 each year thereafter.

Some people advise that you need to change your hairstyle if you can’t cut your own hair with a clipper! This is a little extreme, especially for women. Having said that, there is no reason why you couldn’t trim your fringe and ends with hair scissors and go to the hair dresser less frequently.

Similarly, you could cut out the professional manicures and pedicures and do it yourself. That’s about $50 saved per month, adding up to $600 a year. What you are cutting back on is convenience, not the end result. You can still have a nice haircut and clean nails when you do it at home yourself. And like everything else, you will only get better with practice.

3. Shop at Aldi

Saving money on food can be done in a number of different ways, including bringing your own lunch to work and buying food in season and/or on sale. Using these techniques, we have managed to reduce our food bills by 70% over the last year. Despite a healthy varied diet, we are now spending only $3,000 a year on groceries per person.

However, one of the easiest way to save money on food without even thinking about it is to shop at Aldi instead of another big supermarket (e.g. Coles and Woolworths). Aldi’s business model allows them to offer more competitive prices without compromising on quality: pallets presentation, lack of advertisement, exclusive arrangements with manufacturers, bulk buy, etc. For instance, you can currently buy eggplants for $4 a kilo at Aldi while they sell for $8 a kilo everywhere else. In all cases, they are Australian grown, extremely fresh and tasty.

So why pay more for the exact same product? Some studies show that Aldi is on average 25% cheaper than other supermarkets.

If you are doubtful, go out and compare brand name products such as Nescafe, Nutella, Vegemite or Coca-Cola at Aldi vs. other supermarkets. You will see that they are always cheaper at Aldi. And there is no doubt that those are the exact same products.

The main reason why this is an easy move is that Aldi is often located close to a Coles or Woolworths. So you don’t have to walk or drive somewhere else, you are going to the same shopping centre anyhow! All you need to do is enter a different supermarket.

And if you cannot find exactly what you are after, you can still go to Coles or Woolworths afterwards. We still buy a couple of speciality items from other retailers (especially when they are on sale) but our main weekly shopping is done at Aldi. Aldi has a better price/quality ratio than the other supermarkets, especially for fruits, vegetable and meat – which make up the bulk of our diet. Furthermore, you should aim to buy generic brands over brand name products whenever you feel comfortable.

4. Cut the energy bill

One day, a trader I work with casually mentioned that he always run his dishwasher at night using the ‘delayed start’ option because electricity is much cheaper at that time. At first I was a bit taken aback. This guy earns more than most people, does he really need to save money in this way? It seemed a bit cheap.

On reflection, however, I realized that he was actually being smart about how he spends his money. And – as you probably know by now – I like the idea of not wasting money. So I employed his energy saving technique and also tried to find other behaviour I could make positive changes to.

One of the big money savers we’ve found is not using a clothes dryer, but rather hanging clothes on racks to dry. This will save your electricity bill as well as your clothes – did you ever shrink or melt clothes by mistake?

We are also careful about turning lights off in unused rooms and changed our light bulbs to energy efficient ones. Sockets should also be turned off if unused, especially if you have a TV or other media devices in standby mode, as these devises will still use electricity even when not in use!

Mobile phone chargers are another culprit. Even if your phone isn’t plugged in, most chargers still use 100% electricity. It is thus perhaps unsurprising that studies show most households are using 7% to 13% of their consumption on items in standby mode.

So, how about saving 10% in electricity costs just by turning off the power socket on devices that are not actually in use? It is as much about saving money as it is about avoiding waste.

5. Open a High Interest Savings Account

I have covered this topic in the post about the highest-paying savings accounts in Australia. But the main driving idea is applicable to any other countries. The sad fact is that many people do not optimise their savings rate. It would be understandable if it were a complex or unsafe process. But it is not!

Most Australians have a checking bank account with one of the big 4 banks (ANZ, Commonwealth, NAB, Westpac). But those banks do not offer the best savings rates on the market. The best rate will be offered by Internet-based companies, as these can cut on the cost of having physical branches and pass those savings onto their customers.

The best part of this is that my top choices (Rams and Ubank) are actually backed by leading banks (Westpac and NAB respectively). This means that these accounts are as safe as the ones you have with the major banks.

Having gone through the process, I can tell you that it only takes 10 minutes to open an account online. The consequence is an extra 2% interest on your savings. 2% may not sound a lot, but if we start applying this extra compounding to the capital, you’ll quickly notice a difference.

On a savings sum of $100,000, this equals to an extra $120,000 free money over 25 years. And all you need to do is spend 10 minutes filling in online forms! Seems too good to miss.

Another benefit is that the online savings account is directly linked to your current checking account at the major banks. You can thus transfer money in and out 24/7 without any fees whatsoever. I really wonder why anyone wouldn’t open such savings account. I personally don’t see any valid reasons not to! Unless you hate free money…

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