The money hack that helped Sarah save $260 a year

When it comes to keeping on top of your money and finding ways to save better, Sarah Megginson always recommends one particular hack she has used herself for years.

Each month she sits down with her husband to look through their financials, what they've been spending, how much they're saving and whether there are any changes that need to be made.

It was at one of these meetings that Megginson from Finder, realised they were making the same costly mistake as 15 per cent of Aussies – paying for unused subscriptions.

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"We discovered when we were doing this that we actually both had family Spotify accounts for $20 a month and once we realised, I cancelled mine and I just joined his," she tells 9honey Money.

"It's not a huge money leak – it was only about $22 a month, but over a year, that's [$264] and when you have that happen a few times, that's where some of that money starts to start to fritter away with no real benefit.

"I'd much rather have that money in my pocket than theirs."

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Even with her financial expertise Megginson is human and makes mistakes with money like the rest of us – well, 68 per cent or two in three of Aussies, according to new research by Finder.

The most common money mistake the survey found people are making is spending too much money shopping, with 34 per cent of those surveyed admitting they've done that.

Megginson isn't surprised, noting just how easy it is to spend these days with shopping available 24/7 on our phones and a purchase just a tap away when card details are saved in apps and shop accounts.

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One way to prevent this is to remove your card details from anywhere they're saved online as this gives you more time to think as you make the effort to get your card out of your wallet. It also prevents a security risk if those sites get hacked.

"The thing that really helps you avoid overspending is adding friction back into the process, and that's one of the things that we've been so successful at with technology, is removing friction and making it easier to spend and shop," Megginson explains, suggesting just taking the amount of cash you want to spend with you when you go out instead of your cards.

Sometimes overspending on non-essentials, going out at bars and clubs and even food delivery services can end up happening when we're trying really hard to save by not doing these things because we haven't left any room for them in the budget.

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"If you completely take all of your discretionary spending off the table... it's like a diet you're more likely to splurge and then have an overspend moment. So one thing that works really well for people is to actually set aside the amount that is your fun money per week or per fortnight or per pay period," Megginson says.

"We all have a different thing that we spend on that brings us a bit of joy, but setting aside a budget for that and treating it as if it is any other expense in your life, like your energy bill or like your insurance can help you really mindfully enjoy that thing without overspending."

The second most common money mistake is paying bills late, something 25 per cent of people said they've done.

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Megginson has a simple solution for this that means you'll barely have to think about it once you've set it up.

"I definitely think one of the tips that really is helpful for almost anyone is to automate your bills so that they are taken care of the day you get paid so the best way to do this is to have a separate bank account," she says.

"Doing that just means you never end up short when there's a bill due and you almost psychologically detach yourself from that money. The money comes in, it's completely sequestered away straight away, so it's not yours to spend and that eliminates a huge amount of money stress around knowing when bills are due and how to find the money for it."

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But the important thing if you're making any so-called money mistakes is not to take them to heart because they happen to everyone and noticing them is a good thing as it means you can make a change.

It's one of the reasons Megginson loves talking about it "so that people can see they're not alone and that there are ways to do it better."

"One of the big things around money mistakes is that word 'mistake' implies we've done something wrong. I think so often with money there's a sense of shame that goes with it, or a sense that we've made the wrong decision, and that we're to blame for where we've ended up and that can end up compounding things, because you don't then reach out for help, you don't talk about it.... and then you continue to make the same decisions," she adds.

That's why Megginson loves the idea of the monthly money meeting and sitting down with yourself, or partner if you live together, to check on your finances.

And don't let the idea of talking about bills and budgeting each month sound like a tedious exercise, the finance expert wants you to add your own special touch to it so that it becomes something you're more likely to do.

"I always recommend you try to make it as fun as possible. Depending on what fun looks like for you, it might be a cup of tea and a biscuit, it might be a glass of wine or a beer or whatever ritual you can do to make sure it's something you look forward to and sit down and have that one hour to look after yourself and your money," she says.

If that fun element doesn't work, remember the $264 Megginson saved in just one of these sessions and the potential savings you might find yourself spending just one hour looking at the budget each month.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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