Solving The Savings Mystery

How to save can seem like a real mystery to most people. It can seem like an impossible task, but in all reality it is quite simple if you are disciplined to put the money aside and not touch it. You have to have a reason to remain strong with your savings though and in most cases that reason is to allow yourself to have something in the future. After all that is why you want to save in the first place isn’t it!

Below are two case studies of people we would like you to meet and how they Solved the Mystery of Saving.

Sandra

Meet Sandra and see how she is going to get her finances in order after being recently separated from her husband of 15 years.

Sandra has recently separated from her husband of 15 years and as Rick used to do all of the finances she has been struggling with the concept of money management. It has been one stress after another coping with the changes in her life but she is now slowly getting things sorted out which is allowing her to see things with a clearer mind.

Since being a member of Money Detective, Sandra has realised the importance of tackling her problems face on and she has spent time learning how to set up a budgeting system and is now looking at getting some savings built up so that she can take a well deserved trip overseas to see her sister.

Sandra knows that saving money is going to be a big challenge for her but she is prepared to make sacrifices and change her habits to allow this dream to come true. She knows that her sister is anxious to see her so that they can have some quality sister time together. They have always been there for each other during the tough times in their lives. Luckily for Sandra the trip doesn’t have to cost much as she is able to stay with her sister, so all she needs to do is pay for airfares to the UK, and have some spending money. Sandra needs to save $3,400. She would like to go within the next 6 months.

Using the Money Detective Savings Calculator Sandra has worked out she needs to save approximately $567 a month over the next 6 months to reach her goal. This figure seems quite daunting to her so she has broken it down to see that she needs to save $132 a week or $19 a day. Looking at it from this angle seems more achievable and much easier to find a solution.

Sandra has taken the option of setting up a separate savings account to build up her money and she has titled it her ‘holiday account’. She has set this up with an online bank as the interest on offer is more attractive than a standard bank account plus there are no fees attached.

Sandra has decided that she is going to make some sacrifices and cut down on some of her spending. She is currently having a lot of takeaways and meeting her girlfriends for coffee chats at coffee shops. This is costing her about $50 a week so she has decided to cut this out and save this money instead. To ensure she captures this money before it is spent, Sandra has set up an automatic transfer from her bank account to her savings account each Friday morning. Her pay goes in each Thursday night so by doing a transfer each Friday the money will be out of the account before she has a chance to spend it. By trimming down on these items, she now only needs to find another $82 a week ($132-$50)!

So, Sandra has decided that she is going to get herself a part time job doing some proofreading. She has the skills to do this, as she currently works as an English teacher at the local high school. She is going to get paid per document that she proofreads, but is assured of getting sufficient documents per week to give her after tax about $50 a week. She will arrange for the income from this job to go straight into her savings account. Now all that needs to be found is an extra $32 a week ($82-50)!

Sandra thinks hard about what she can do and remembers a conversation with a neighbour telling her that her 2 children are struggling with school. She decides to approach this mum and offer her services of tutoring the children for an hour a week and they agree on a sum of $40 a week. As this will be paid in cash, Sandra has decided to keep this money in her purse as part of her weekly allocation for spending but will instead increase the transfer she will set up from her pay account to her savings account to $90 a week (being the $50 she will save by cutting back spending and this $40 earned from tutoring each week).

Bingo, she has now reached her desired target of being able to save over $132 a week. That wasn’t too hard. Sandra has now started a Money Detective Savings Tracker so that she can see her savings build up and keep on eye on whether or not she is on target to reaching her goal of saving $3,400.

There are some sacrifices that Sandra will be making as she will need to cut out takeaways and coffee shop chats but as the most important thing for her right now is to get to see her sister, she is more than happy to do this. Her friends understand why she is determined to save some money, so they have all decided that they will meet at each others houses for coffee instead. Sandra also knows that she will need to manage her time a little better now to fit in the tutoring and proofreading, but as both of these jobs are quite flexible in hours she knows she will find the time. After all, she doesn’t have to spend time now looking after a husband!

Sonny-Bo

Meet Sonny-Bo and see how he has changed his attitude toward debt and how he is going to build up some savings for his next purchase instead of using the credit card.

Debts have always been the answer for Sonny-Bo. If he wanted something he just went out and bought it using the credit card. It was the quickest and simplest way of getting what he wanted as soon as he wanted it. All he had to think about was the enjoyment the purchase would give him. He has a house full of the latest and greatest gadgets as a result of this attitude.

Since being involved with Money Detective and realising that there are other ways of doing things, he is going to give it a go to try and pay cash for his next purchase. He has admitted that the approach he has had to spending money in the past has cost him a great deal of money and that despite earning a good income for many years, he has nothing to show for it other than his gadgets.

Not allowing himself to dwell on the past, he has decided to move forward and change from today. He wants to set up a savings plan and wishes to set aside $80 a week so that he can build up $1,000 to buy some musical equipment. He is in a band and wants to encourage the band to make some money playing some gigs but they need to upgrade some equipment before they can start down this path. Sonny-Bo hopes to put this money he earns from the band aside so that he can eventually build up a deposit for a house. He would like to buy his own place in 2-3 years time.

In the past most of Sonny-Bo’s income has gone onto his credit cards to keep them in order. There was never any money left over at the end of his pay period as it just seemed to vanish into a big black hole. As Sonny-Bo is now using a budget and has a debt management plan in place for his credit cards, he is in control and managing well. Squeezing $80 a week from his money though is going to be tight and will mean that he needs to cut back on some things but he knows he needs to do that today to give him what he wants down the track. He is focussed on his big goal of buying a house.

After reading Money Detectives Ways to Make More Money Sonny-Bo has decided to give some private lessons in guitar playing. He has been playing since he was 8 and has great skills. He places an advertisement in the paper and also at the local shops and gets two students. He is going to teach each of them for 40 mins a week and will earn a total of $40 a week after tax.

Despite looking hard over the Money Detectives Saving Money Tips again, Sonny-Bo can’t find any way of getting his extra $40 a week as he can’t seem to trim down his budget any further without eroding his debt management plan, which he doesn’t want to do. He has already cut things down to the bone and has already implemented these tips to get him to where he is now. Then he comes up with a brilliant solution.

Sonny-Bo is renting a 3 bedroom house with his mate Michael and they are paying $165 a week each to cover the $330 rental payment. If they get a mate to move into the third room, they could reduce their individual rental commitments to $110 a week, giving them each $55 a week extra. Plus they will save some money by sharing the utilities. Michael is happy with this as he is saving hard to go for a trip to New Zealand with his girlfriend. They are prepared to sacrifice the space in the house to give them money that will allow them to meet their individual goals.

Sonny-Bo has decided to use one of his existing bank accounts as a savings account and is going to pay his tutoring money into this account on a Thursday of each week. Whilst at the bank, he is also going to arrange to transfer the $55 he will have spare in his budget from his pay account straight into his savings. He is amazed how easily it can be to find a solution to things in the past he would have thought would have been impossible. He is working a budget, he has a debt management plan which will soon clear his credit cards to zero, and now he is saving toward a short term goal which will help start him off on his journey toward his big goal of being a home owner. He is rather enjoying the new challenges of better money management and can’t wait to one day be in his own place.