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In today’s age of easy credit, real luxury lies in being debt-free. I can still vividly recall a couple of weeks back when a younger friend, W, walked into my office and proclaimed how relieved he felt. W had trimmed his debt down 80% and was only a couple of months from clearing them totally.

Being Asian and a Chinese Hakka (a dialect tribe famous for thriftiness), I can easily switch to a ’saving’ mode whenever the need arises. In fact, the mode will kick in automatically and dependably after a short spending spree.

This post delves into this Hakka man’s bag of tricks and summarizes them into 10 easy steps for you to start saving more money.

1. Track Your Spending

For at least one month, be unusually diligent and record all the expenses you incur - including cash, cheque and credit. If you have automated payments set up in your bank account, record those too.

Separate all your spending into 2 groups: committed and actionable.

Committed expenses should include home mortgages, car loans, student loans, insurance premiums, parents’ allowance, etc. These are financial commitments you cannot reduce or get out of.

Actionable expenses include your meals, coffee breaks, grocery, transportation or petrol, utilities bills, entertainment, etc. These expenses can vary widely depending on the individual.

The idea behind tracking and organizing your expenses is that you get a good snapshot of where all your money is going.

2. Set a Goal

Once you know how much you spend in a month, compare it to your nett take-home income and set your savings goals as follows:

• (Committed + Actionable) > 110% of Income : you are most likely in debt and not in a position to get out of it right now. Start saving aggressively now!
• (Committed + Actionable) ~ 90% of Income : you could be in debt but you can take care of it. Focus on clearing your debt and set a goal to save another 10% out of your income.
• (Committed + Actionable) < 80% of Income : you are a conscious saver and living well within your means. Maintain your current lifestyle and all should be well.

In all cases above, I am recommending that you save at least 10% of your take-home income and if you are already saving some, try another 10%.

Using the above, you can compute the exact amount that you need to save per month. That amount will have to come out from your Actionable Expense items.

3. Stackbacks - a Brute Force Method

If you spend more than you make and low on self-discipline, Stackbacks is just the medicine for you.

The Stackbacks technique works because it prioritizes your savings as the first ‘expense’ item that comes out from your paycheck. You will also be leaving your credit cards at home and giving yourself access to funds you plan to spend. In short, Stackbacks is about cutting those supply lines so you ultimately cannot spend.

I’ve used the Stackbacks method to get accustomed to a new, reduced expenditure pattern. I kept to it for 2 months, just long for the habit to form.

4. Saving on Food & Groceries

• Lose Weight - If you are on the heavy side like me, go on a diet (and exercise) plan. Don’t waste money joining gyms and weight-loss programs, do it by eating less, walking and jogging. I find it a lot easier to keep to my dieting and workout schedule when I justify it further with the savings.
• Become a Foodie - Join the local foodie forums to learn about places that serve great food at great prices.
• Learn to Cook - for some time, it has been less economical to cook at home, especially if your household is small. Raging commercial rentals and rising staple food costs are changing this around. Now is a great time to learn all those great dishes from mom. Eat better and save at the same time! If there’s only one or two of you, get to know your neighbors and organize cook-nights on rotation.

5. Saving on Utilities

• Choose Energy Star rated electrical appliances on your next change of televisions, fridges, washing machines, PCs, and so on. Be aware of how much electricity costs in your country (expressed in $/kilowatt-hour or kwh) and keep it handy to compute savings from these appliances.
• Switch off at the wall - appliances with a standby mode continues to consume electricity even if they are switched off. These appliances is truly turned off only if you switch off the source at the wall. You can save around 10% of your electric bills simply by turning off everything you don’t need at the wall.
• Set your air-conditioning to 25 degree C - this is the optimal productive temperature, comfortable and no jackets required.
• Install water-saving nozzles on all your taps and shower heads

6. Saving on Transportation

• Drive less - I started a while back designating Saturdays as Zero Emission Day. This to play my part on saving the environment by not driving my car. I either take public transport or walk on these days.
• Don’t speed - find the ’sweet spot’ on your gas pedal where the engine doesn’t kick into overdrive. It helps if your car has a fuel usage per 100-kilometers. I find that you keep up with city traffic at a less than 10l/100km.
• Plan your routes - whether driving or taking public transportation, you can save by optimizing your travel routes.
• Walk when you’re not in a hurry - when the weather is cool, I’d choose to walk for distances up to 30 minutes.

7. Saving at Home

• Watch less television - my informal survey amongst friends reveals that families with higher than average utilities bills all have at least one TV-addicted child or elderly in them. You don’t have to get rid of them, just convince them on a more balanced intake of television, magazines and books.
• Choose laptops over desktops because laptops consume less than 50% of electricity consumption of desktops.
• Stamp out bit-torrenting - this is the single reason why your teenager has to keep his/her computer on all the time. Educate them on anti-piracy and wean them off it. A typical desktop PC kept on for over 24 hours will consume 216 kwh per month (~$50 in Singapore).
• Sun-dry your laundry whenever possible.

8. Saving on your Shopping

• Always wait for sales season - there’s always one coming around the corner. Never buy on impulse.
• Join loyalty programs for brands or shops that you frequent and spend a fair bit at.
• Always ask yourself ‘do I really need this’ every time you feel the urge to buy something. You don’t have to deprive yourself but neither do you have to own that 35th pair of heels.

9. Saving on Luxuries

• Workout at a friend’s condominium’s gym. Brisk walk or run if that is not available.
• Watch movies on low-price days. In Singapore, the price differential is 50%.
• Work at Starbucks if you are a freelancer. For the price of a grande brew of the day ($3.50), you get desk space, piped music, wall plug for your laptop, free wifi and the sweet aroma of coffee beans!

10. Reward yourself

• Get a little something for yourself from the the savings you’ve made. When I did the things in the Utilities section and saved about $100 in the first month, I bought myself a DVD as a reward.
• Use those bragging rights - I showed off my utilities bill to family, friends and colleagues and shared with them how I did it. Everyone loves a money-saving tip and it also makes wonderful dinner conversation.

I hope the compendium of tips above will motivate you to do something about saving today. Please share your personal saving experience and any other cool tips that you might come up with!