How to save $10,000 on your current income

I might need to refer to this reading later there, so I'm saving it as an article first. It's taken from Essential Baby website.

SO it's not in the true spirit of the season but I'm going to tell you how to save $10,000. Besides nobody says you have to start right now. Although just between us, I would if I were you - after all Christmas is perfect for getting your priorities in order. But don't let me stop you writing out your gift list, since it'll be handy practice for what comes next. Oh dear, you're flagging already. Remember $10,000 is at stake here. There, that's better.

Christmas is one of the biggest expenses of the year but you can still enjoy it without going over the top. Ask people to bring a plate, says Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation. "And consider introducing a Kris Kringle-style Christmas," she says. That's where everybody in the family buys one present. Um, yes, you only get one too. "The emphasis is then on spending time together, rather than simply spending money." Let's be conservative - and I take it as read you're normally very generous - and say this will cut your Christmas costs by $100. You can save this for next year, or how about donating it to charity?

EVERYDAY SAVERS ($1000)

Back to the list. You should draw one up for the supermarket as well if you don't already. The easiest way to stick to it is to leave the kids and the credit card at home. One's inconvenient in wanting stuff you don't need and the other's too convenient for the same reason.

Paying cash, after all, restricts you somewhat to your budget.
Once inside the supermarket, watch out for booby traps all over the place. Never go there on an empty stomach (for obvious reasons) and wear something warm (supermarkets are cooled slightly below comfort level because apparently this makes you hungry). Have you noticed the milk is always at the back? So are other essentials so you have to pass through aisles of temptation to get there.
"The end-of-aisle racks in supermarkets often given the impression of offering bargains. This is not always the case. The cheapest goods are often found on the top or bottom shelves," says Citibank in its http://www.usecreditwisely.com.au/ website of handy hints, though you might care to scan Investor's 20 tips (opposite) as well.

For basics such as sugar and flour Citibank says you can safely use cheaper house brands as well. Along with our 20 tips that's, say, a saving of $300 a year at least. Cut out the daily cappuccino on the way to work and don't hide the snack to go with it, so that's another $700. There, you've saved your first $1000 without having to do a thing. Well, going without having a thing or two perhaps but nothing you can't manage. And so to the heavy hitters.

MORTGAGE MAKEOVER (UP TO $10,000)
Giving the mortgage a makeover will do wonders for your finances and it doesn't necessarily mean paying it off faster though that is a help. Check what your interest rate is. My bet is you can do better and your lender knows it. The banks, for example, will knock up to 0.5 per cent off the standard variable rate for customers who threaten to take their debts elsewhere. On a $250,000 mortgage, that'll save you $84 a month, or a bit more than $1000 a year - $10,000 in about nine years. Wow, we're there already. Even if, like most borrowers, you're not paying the bank standard rate, there are still possible savings. For example, you might fix some or even all of your loan for five years at the best going rate which is a smidgin less than 8 per cent. Even after allowing for exit or switching costs, that's still potentially thousands over five years.

Making fortnightly instead of monthly repayments is another great way to save interest. But since that really means you're making one extra repayment a year (26 fortnights works out at 13 monthlies) that doesn't count on a technicality since the idea is to cut spending, not add to it no matter how great the reward.

CREDIT WHERE IT ISN'T DUE ($300)

The next target is the credit card. Forget the reward points if you don't pay off the card each month. You're better off ditching the fee and making sure you pay it off each month. The interest you save can then go toward a discount airfare. Check the zero or low-interest honeymoons as well. "Swapping a $2000 balance on a card with a rate of 18 per cent to a new card with a 12-month introductory rate of, say, 6 per cent could see you save $240 in interest for the first year," Citibank says.

A zero fee with zero interest - at least for a while - would have to be the credit card jackpot. The Coles Myer Source MasterCard has no annual fee and no interest for six months on transfers from other credit cards. That brings credit card savings to about $300 a year. Oh, one other thing. You can slash the interest on your credit card by re-financing it with a home equity line of credit. But there's a trap.

Pay it off with the same amount as you were before, otherwise you're switching from high-cost short-term to low-cost long-term debt - and could eventually finish up worse off.

BANK ON IT ($1500)

Don't mess with the bank. There's a fee lurking around every corner, from dishonoured cheques to penalty interest for going over your limit.
But the most common and easiest to avoid fee would have to be using another bank's ATM which will cost up to $2 a pop.

If there's one of those a week, just walking down the street would save you about $100 a year.

Often accounts have a withdrawal limit which if you exceed it racks up more fees. The best way to cut the number of withdrawals is to take more out each time, especially at a check-out because the extra cash out doesn't count as another withdrawal. That should be worth another $100 a year, shouldn't it? Alternatively, choose an account with a flat monthly fee of $5 such as Citibank's which has no limits, plus the bonus of no ATM fees if you use another bank's.

There are also big savings to be made if you make the mortgage your banking hub. Pay your salary into the mortgage and draw it down as you need it, or link a fee-free credit card to it which you pay off once a month. "We found consumers can save over $1300 a year by using a package of mortgage, transaction account and credit card, compared with stand-alone products within the same institution," says financial analyst Harry Senlitonga of Cannex.
POWER IT UP ($250)

Merging electricity and gas with one supplier, or signing a contract for a fixed period, will save about $100 a year.
Unfortunately this won't bring lower gas or electricity prices, but it will take most of the sting out of future increases.

That's the easy part. There are ways of saving as much if not more but they require some, er, energy. You'll have to switch off all the stand-by modes on the DVD-VCR player, TV, stereo, CD player and computer. This might mean waiting an extra, oh let's say three seconds for the thing to warm up when you switch it on, or in the case of my computer a good 10 minutes, but you'll save $150 a year on average, a survey by the Greenhouse Office found.

TALK ISN'T CHEAP (UP TO $500)
The key to working out the best phone deal is to look at the rate charged per call, rather than how many free ones you get or the rental. Also check out the flagfall - this can be the cost of a couple of calls before you even get a line.
Fortunately it's not too hard comparing packages as http://www.phonechoice.com.au/ has done it all for you. The website also has some useful tips about mobiles. Such as: the phone companies are phasing out free handsets from their plans.

And choose the same provider as your friends - calls to the same network are a lot cheaper. Unless you're in the bush, that is, where you'll just have to choose whatever works.
For capped plans, the traps are whether SMS and voicemail count in the cap, the high call rate if you exceed the limit and the 30-second timed calling blocks which can result in a 31-second call being charged at one minute.
Speaking of timed calls, remember the most expensive calls you can make are from the home phone to a mobile.

If you make a lot of interstate or overseas calls on your home phone, look out for specials and find out the so-called override four digit code of other phone providers. That way you can get onto another network's special rates without losing your normal discounts.

Even without teenagers in the house, you should save at least $100 a year with the right phone plan. With teenagers make that at least $500.
Using the internet for phone calls, known as VOIP, will save even more but you need a broadband connection. Then again sending emails would be cheaper. Which reminds me, if you link your internet service with the home phone and mobile, you'll get discounts for all three.

DRIVE AWAY (UP TO $5000)

You don't need me to tell you one of your biggest expenses is the car and that's not counting the price you paid for it.
Motoring groups estimate the average weekly running cost of a car when you take registration fees, fuel, insurance, interest and repairs into account is $200.
That's more than $10,000 a year and shows what a drain having a second car must be.
Even if you add in the cost of using public transport, getting rid of a car would be a net gain of about $5000 a year. Or form a car pool with friends and workmates.

THE TALLY

So fat that's more than $10,000 saved and I'll even throw in washing your clothes in cold water which will apparently save about $400 a year though the price of a cold shower is, I'm sure you'll agree, not worth it. And don't get me started on private health or home insurance, broadband, vet fees, holidays, the grog fridge in the garage or air-conditioning.

One last thing. Don't forget if you, um, save the savings, compound interest will kick in.
Saving $10 a week and investing it in a balanced fund earning 9 per cent a year would grow to $7289 after 10 years, MLC calculates.
If you cut spending by $30 a week and re-invest it, you'll have $21,866 in 10 years.