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These seven budgeting tips will help you navigate the cost of living crisis and discover practical strategies to save money.
Budgeting is more important than ever in our current cost of living crisis in Australia. Here are our top tips to help you budget and save money at the same time.
If you don’t already have a budget, prepare one ASAP with two columns. List all your regular income in one column and all your regular expenses in the other. Then categorise all your expenses as being either essential or non-essential.
If you already have a budget in place, then simply review and update it, following the same approach. A budget needs to visible and referred to often to be effective.
Once you have identified all your non-essential expenses in your budget, see if you can eliminate (or at least reduce) each one. Then make sure you stick to your new and updated budget for those expenses. This may even mean you pause on some spend items for a period to realise the valuable savings.
Many people make the mistake of spending first and then trying to save whatever they have left over from their regular pay. You should do it the other way around.
In other words, once you have a budget in place and have reviewed all your non-essential expenses, get into the habit of saving. You can do this by saving a realistic amount before you’re tempted to spend it on non-essential expenses. Set up a direct debit to put that money into a dedicated savings account on the day you get paid. Start with a small amount like 3-5% of your pay. You will be surprised at how much your savings will build over time.
Energy costs like electricity and gas can be a major drain on your budget, so make sure you shop around for the best deal. Many energy providers will offer deals for new customers, so make sure you take advantage of them.
Once you’ve found a better energy deal, see if you can be smarter about how you use your energy. This can be as simple as turning off appliances when you’re not using them and using natural light as much as possible.
Before buying groceries, check the contents of your pantry first. You might be surprised at just how much you have.
Grocery costs can certainly add up, so make sure you shop smarter by buying specials, buying in bulk, using discount vouchers or loyalty cards, buying from fresh produce markets and shopping around to save money. Major retailers may be convenient but also often charge more, consider alternatives, especially for the bulk or staple items.
Many people make the mistake of spending first and then trying to save
Cutting your expenses isn’t the only way to ease your budgetary pressures and save money. The other way is by increasing your income. Ways that you can do that include:
This could potentially save you the most money of all. Your home or investment property loan repayments are likely to be the biggest regular payments that you make. If you aren’t paying the lowest possible interest rate, then you’re paying too much interest and your repayments will be higher than they need to be. Here’s more about the benefits of refinancing your home loan.
Even a slightly lower interest rate can significantly reduce your repayments and ease the pressure on your budget. So, it’s worthwhile talking to a refinancing expert like one of our team at DPN to see if you can get a better home or investment property loan deal.
You can also save money by refinancing any high-interest debt you may have (like credit card or personal loan debt) into your lower-interest home or investment property loan debt. This will not only save you money, but also make all your debt easier to manage via a single, lower repayment.
Budgeting is a great way to manage your finances, especially in a cost of living crisis like we have now in Australia. Smart ways to help you with your budget include:
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