Heres how spending money to save it can make financial sense

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SPENDING money to save money may not seem smart at first glance.

However, if a few dollars spent today brings you greater savings down the track, the cost is worth it.

David Rankin, the founder of personal budgeting service Sort My Money, says saving money by spending money can start with your stomach.

Rankin bakes his own bread and says the advent of affordable modern bread ovens has made it easy. A $200 bread machine pays for itself in no time, he says.

THINK OUTSIDE THE LUNCHBOX

Going gourmet for lunch is much cheaper if you do it yourself rather than buy it at work.

You can afford to treat yourself and get creative. Make it enjoyable and you make it sustainable, Rankin says.

He says a good coffee machine can dramatically cut your costs. Spending $250 will get you a good coffee machine, and $15 will buy you a kilo of premium Italian coffee. If you already have a daily habit, this could be the best investment you ever make.

BUY MORE MOBILE DATA

Rankin says a tight mobile phone data plan often turns out to be a false economy.

With the wrong data plan, youll be paying extra on a regular basis, in order to finance a monthly data blowout. In our mobile-streaming reality, a generous data plan can turn out to be a wise investment, he says.

UPGRADE YOUR LIGHTING

Halogen light bulbs use much more electricity than LED globes and downlights. Rankin says this can potentially translate into hundreds of dollars of unnecessary costs.

Some states offer incentives where governments will help cover to costs of upgrading to LED.

LET THEM ENTERTAIN YOU

Buying a local Entertainment Book full of discount vouchers in your area is usually a no-brainer, Rankin says.

Youll save on restaurants and movies, and youll also get into others proverbial good books with some great gift ideas. Just make sure you leave it somewhere prominent, so that its accumulating savings for you, rather than gathering dust.

ONLINE AND UPFRONT

The Australian Securities and Investments Commissions senior executive leader in financial literacy, Miles Larbey, says you also can search online for discounted shopping, travel and dining experiences.

Consider paying for activities and services, such as your annual gym membership, upfront rather than in instalments to help you save money later, he says.

Larbey says before committing to extra spending, review your finances.

The best way to do this is to prepare a budget as this will show you where your money is going. You can use ASICs MoneySmart budget planner to track your expenses and help identify opportunities where you could save.

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