Top ways to cut your expenses and increase your savings

Is the key to saving a home deposit as simple as giving up ‘smashed avo’?

Well not quite. But spending less does make a difference.

Here are some top ways you can control your spending to reach your savings goals so much quicker.

Start by understanding your spend

It can be easy to lose track of how you’re spending money, especially if you often rely on cashless payments and credit cards.

Many online banking systems include tools to categorise debits and make a budget – so take advantage of them. Or download an app that helps you track your personal expenses on the go.

Find savings in the essentials

Some costs can’t be avoided – but many everyday expenses can be reduced – so look for opportunities to save in all areas of your spending, not just in your indulgences. For example, you could:

  • Move in with your parents/relatives, or move into a cheaper rental or share house (short-term discomfort can pay off in the longer term).

  • Implement daily or weekly tactics like meal planning, making grocery lists and buying in bulk to save money on food. Set aside a budget for eating out/take-away and stick to it.

  • Shop around to reduce your regular bills – you may get better value if you switch, or tell current providers you intend to switch. Seek discounts for taking out multiple policies with one insurer.

  • Use the car less: take public transport; carpool with colleagues; or try walking or riding. You’ll be amazed at how quickly it all adds up to savings. 

  • Make sure you’re paying off debts or credit cards completely each month or as much as possible, to avoid the added expense of paying additional (compounding) interest. 

Reduce common overspending

If you spend excessively on things like a daily coffee, buying clothes, going out or expensive hobbies, it may be unrealistic to cut the expense entirely. It can be important to indulge occasionally. Instead, set a weekly or monthly luxury-items budget and reduce that limit over time. Or, if you do come across an item you feel you ‘must have’, don’t buy it straight away. Instead plan to buy it in a day or two’s time. In that time, you’ll be able to consider that purchase more rationally and come to realise you could do without it after all. 

A Galaxy survey of more than 1000 Australians showed that 73 per cent have a problem with overspending. In particular, people tend to go overboard each time Christmas rolls around. 

To reduce gift expenses, be like Santa: make a list (and a budget). Buy only planned items within your allocated budget – then stop! To help manage gift-recipient expectations and family peer pressure, arrange with your family to put a cap on gift values. That way you won’t come across as ‘stingy’.

Another common way Aussies overspend is on holidays. CommBank research has shown that a third of holidaymakers spent more on their trip than planned. Do your research and set a daily budget. If you are travelling overseas, consider setting up a separate bank account or a foreign currency card, instead of relying on your credit card. That way you can’t spend more than you’ve budgeted for (unless it’s an emergency).

Cancel those unused subscriptions

Another opportunity to reduce your spending is to review those ongoing but forgotten, monthly fees you may be charged for plans and subscriptions. For instance, are you paying for gym membership that you don’t use, or Netflix that you don’t watch? Or are you even paying too much on your phone or internet plans?

A good way to get a snap shot of these expenses is to review your credit card and bank statements. Although $15 a week for the gym or Netflix doesn’t sound like a lot, it adds up to $780 per year.

Instead, if you can cut these unused plan or subscription expenses, have the amount saved each week automatically transferred in to your savings account.

Overall remember, every wasted dollar is money you could be spending on your own home.

Source: MFAA

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA)

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Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.