Easy Ways to Budget: 10-Step Savings Plan

Looking for easy ways to budget and save to beat the rising cost of living? Canstar’s 10-Step Savings Plan is your key to unlocking your savings potential.

Spending less than you earn and saving regularly – even if it’s a small amount – is the key to building wealth. That’s why giving your budget a makeover is one of the best ways to take better control of your money.

Canstar’s budget plan consists of ten simple steps that you can complete at your own pace. And once you’ve finished them all, you should find that you’ve more left over each month to put towards your debts, saving or investing.

Here’s to unlocking your savings potential!

Canstar’s 10 Step Savings Plan:

Savings Plan Step 1: Build a budget

The first step to creating a savings plan is to determine where your money is going. One of the best ways to do this is to build a budget. This involves listing all the money that you bring in and comparing it to your spending.

If you do all your banking digitally, and only use debit and credit cards to make store purchases, this should be a simple task. All the relevant information will be available through your online digital accounts and apps.

However, if you’re a fan of cash, gathering the information will be trickier. You’ll have to either keep receipts or a record of all your purchases and outgoings.

Make sure you include absolutely everything. Don’t forget expenses that are not always regular monthly payments, such as your car registration, insurance payments, rates, etc.

You can then use all the information you’ve collected to build a long-term budget. You can put pen to paper, use a spreadsheet or click through and use Canstar’s Budget Planner.

Tools and resources

Calculate a budget based on your income, living expenses, debt repayments, and more:

→ Canstar’s Budget Planner

Savings Plan Step 2: Analyse your findings

Once you’ve listed all your income and expenses, it’s time to step back and look at the numbers. The first thing to do is to work out if you have any money left over at the end of each month.

Hopefully you will, but if not, don’t despair, this savings plan will help you find ways to cut costs and put your budget back into positive territory.

Next, take a look at your expenses for any areas of spending that jump out as potential problems. For example, are you surprised at how much you spend on takeaway meals, or are your grocery bills higher than you expected? If you do have problematic expenses, think about ways to reduce them.

At this stage it can also be a good idea to set a formula for your spending. This helps you estimate how much of your income you should allocate towards different types of expenses. One popular option is the 70:20:10 plan.

This means you divide your take-home pay into:

  • 70% for everyday living costs, such as rent or home loan, utilities, food, clothing and transport
  • 20% for saving
  • 10% for splurging

You can play around with the percentages to find the formula that best suits your lifestyle.

Savings Plan Step 3: Get the best deal on your home loan

If you have a mortgage, there’s a good chance that this will be your major monthly expense. And if your mortgage is up for refinancing this year, you could face a large increase in your repayments, due to rising interest rates.

However, it’s always a good idea to regularly review your home loan to see if you are getting a good deal. Start by finding out what rate you are paying on your mortgage. You can then use Canstar’s mortgage comparison tool to discover if there are cheaper options available.

Currently on our database, there’s a wide disparity between the lowest rate, 6.29% (1-year fixed), and the highest, 8.09% (1-year fixed rate). So for canny consumers who are prepared to do their homework and search out the lowest mortgage rates, there are big savings to be made.

But keep in mind that cheaper doesn’t always mean best, so make sure you weigh up and compare each mortgage’s costs and features. And even if there are better deals out there, it could be a good idea to call your existing lender first to give them an opportunity to match the offer.

If you have no luck, you may want to consider refinancing. Although this can involve break fees, it’s worth doing the sums. Add up all the switching costs and divide this by your monthly savings. If, for example, it costs you $1000 to move but you will save $100 a month in repayments, it will only take you ten months to recoup the cost of refinancing.

Tools and resources

Canstar’s mortgage comparison tools are free, easy to use and can help you find the best rates. And our product ratings are never influenced by any commercial relationships that we have.

The table below displays some of the 1-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for home owners looking to refinance. This table is sorted by current interest rates (lowest to highest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

Compare Lowest Home Loan Rates for Refinancing

Savings Plan Step 4: Cut the cost of your power bills

Power bills can be expensive, particularly during the winter months. And there are only two ways to save:

  • Reduce your energy usage
  • Change to a cheaper energy plan

Reducing your home’s power consumption is always a good long-term goal. This can be achieved by ensuring your home is properly insulated, that your appliances are energy efficient and that you don’t waste energy, for example by leaving on lights and gadgets when not in use.

However, changing to a cheaper energy provider is a quicker and easier solution. Start by grabbing your power bills and taking a good look at them. It might not be the most exciting task, but it can be very useful and help you find ways to save money.

Pay attention to your power usage and the rates you are paying. Could you make use of off-peak power deals, and are you paying fixed daily rates that are too high?

It’s quick and easy to change power providers and there are many new smaller power retailers in the market that are challenging the big four gentailers by offering no-frills, cut-price power deals.

Tools and resources

Over at Canstar Blue, we spend a lot of time analysing power prices and deals. Not only do we rate NZ power companies for customer satisfaction and value for money, we publish hundreds of informative features to help Kiwi consumers find the best value deals.

Some of our recent top-rating articles include:

– Average Electricity Costs per kWh in NZ

– How to Switch Power Providers and Save Money

– Electricity Bundles: Should You Bundle Your Utilities?

Compare power providers for free with Canstar Blue!

Savings Plan Step 5: Reduce your insurance premiums

Insurance is a product we purchase but hope to never use. It’s a regular expense that can quickly add up: car + home & contents + health insurance + pet cover.

When it comes to cutting your insurance bills, the trick is getting the balance right: adequate cover at the best price.

Put together a list of all the insurance you have – including car, home and/or contents, health, life, pet, etc. When you’re compiling this information also make a note of the premium you’re paying, any excess that will apply if you need to make a claim, and the amount you’re insured for (where applicable).

You can then take a deep dive into your policies. The first thing to do is to make sure you’ve enough cover and that you are not underinsured. If you find that there are any gaps, you may want to consider increasing your level of cover.

For example, given the recent steep increases in the cost of building in NZ, do you have the right level of cover for your home should you need to rebuild?

Once you have a better idea of your current policies, it’s time to compare insurers to see if you can find the cover you need at a better price. Remember you want value – not just the cheapest price – so make sure you pay attention to the fine print. It can also pay to get in touch with your current insurer to see if they can match or better any offers.

Tools and resources

Canstar’s insurance Awards and Star Ratings:

Savings Plan Step 6: Get the best phone & internet deals

Mobile phone and internet services are as essential in modern homes as electricity. But unlike power deals that can be assessed easily on price alone, mobile and broadband plans are far harder to compare.

Yes, no-frills providers offer great value bare-bones services, but if your home and family’s digital needs are a bit more complicated, things can soon get confusing.

To find the best-value deals for your household, start by listing all your phone, internet, and streaming services, together with any data allowances and their monthly costs. Also look at your monthly phone data usage. Are you paying for more data than you need, or exorbitant prices for extra data usage?

When you have a clear understanding of your needs, it’s time to shop around to find out what’s on offer and if you are able to secure a better deal.

Telcos are always tweaking their products, and often they don’t let their existing customers know they could be getting a better deal by swapping plans.

But keep in mind that the cheapest plan might not necessarily be the most suitable one for your needs. Many broadband and mobile deals come with either free or discounted streaming services. And consider your data needs and whether a group family phone plan and internet bundle could be the best option.

By grouping phone accounts together, and by bundling broadband, too, the savings can soon add up.

Tools and resources

Over at Canstar Blue we have loads of tools and articles to help you find and compare the best telco deals.

Our Consumer Satisfaction Awards can be found here:

Compare Mobile Monthly Plan Providers

Compare Prepaid Plan Providers

Compare Broadband Providers

And the latest articles on the best deals on the market can be found here:

Savings Plan Step 7: Look for ways to make extra cash

Expenses are just one part of the budget equation. Increasing the amount of money you have coming in can be another way to help give your budget a boost.

There are a few options you can explore if you want to make some extra cash. An obvious one is asking for a pay rise. But it’s essential to go in prepared. Have a clear idea of your market worth and make sure you can demonstrate how you have gone above and beyond your job description.

You may also want to consider taking up a side hustle to make some extra money. Maybe you have storage space or a garage you could rent out, or you could consider taking on extra part-time work, either in the evenings or at weekends.

Savings Plan Step 8: Check your KiwiSaver

When budgeting for your financial future, it’s always worth taking a moment to consider your KiwiSaver. This is especially true if part of your budget is aimed towards saving a deposit for a first home.

Typically, if you are employed and enrolled in KiwiSaver, you have to contribute a minimum of 3% of your salary. However, you can choose to contribute more, either: 4%, 6%, 8%, or 10%.

If you’re currently contributing more than you can afford, you can always think about cutting back your extra contributions. However, it’s generally unwise to pause your contributions entirely, unless you’re facing severe financial hardship.

→ Related article: Is Now a Good Time to Pause My KiwiSaver Contributions?

You should also consider if you’re in the right type of fund – which type of fund is right for your investment profile and risk appetite? And, most importantly, does your KiwiSaver offer the returns you expect and deliver great value for money?

If you want to compare superannuation funds, Canstar has some great tools. Each year our expert research team researches the Outstanding Value KiwiSaver Schemes on the market and presents the best overall provider our KiwiSaver Provider of the Year award.

And our free interactive comparison tables are an easy-to-use tool to compare different schemes across fees, returns and our award ratings. For example, the table below displays some of the products currently available on Canstar’s database for a KiwiSaver member with a balance of $50,000 in an Aggressive fund, sorted by Star Rating (highest to lowest), followed by company name (alphabetical) – some products may have links to providers’ websites. Use Canstar’s KiwiSaver comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.

Compare KiwiSaver providers for free with Canstar!

Savings Plan Step 9: Revisit your budget

Once you’ve completed steps one to eight, it’s time to revisit your budget. Update the budget you created in Step 1 to incorporate any changes to your income and any savings you’ve made by examining your expenses.

You should find that thanks to all your hard work you have more money left over at the end of each month.

Tools and resources

Once again, you can use Canstar’s budget calculator to work out your savings:

→ Budget planner

Savings Plan Step 10: Put your savings plan into action

Now that you know what money you have left over, it’s important to set your financial goals and put a plan in place to help you achieve them.

Having goals is a vital part of becoming financially successful – particularly when it comes to saving money. Having something tangible in mind, such as a house deposit or an overseas holiday, can really help you stay motivated.

Consider breaking your targets into short-, medium- and long-term goals. And if you have a partner and/or kids, get them involved, too, as it will help if you are all on the same page.

Once you know what you want to achieve, put your plan into action. Work out exactly how much money you need to save to reach your goal(s) and how long it will take you. Canstar’s Savings Plan Calculator can help you work out how much you need to put aside regularly to reach your goal in your set timeframe.

It’s important to make the saving process as seamless as possible. Arrange for the amount you need to save to be transferred automatically into a separate account each payday before you can spend it.

Tools and resources

Calculate how much you need to save regularly to reach your goals.

Savings plan calculator


About the author of this page

Bruce PitchersThis report was written by Canstar’s Editor, Bruce Pitchers. Bruce began his career writing about pop culture, and spent a decade in sports journalism. More recently, he’s applied his editing and writing skills to the world of finance and property. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.

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