Australians, here's how you can budget and save money!

July 25 2022

"Increased inflation means tight budgets for many, it's helpful to find ways to budget better and save more." - Miguel Nitorreda, Data Analyst

From groceries and petrol to power bills and mortgages, the cost of living has risen and many Australians are finding it challenging to stay ahead. 

We lined up three pros across the business, food and finance sectors to offer their penny-pinching tips.

Here are the biggest takeaways from the blog. 

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When you get paid, break your money up into separate 'buckets'

A handful of you said that when money arrived in your bank accounts, you tended to spend it straight away.

So how can you change this?

Ms Stewart says it's all about separation. 

"If you have budgeted money for groceries, then each time you get paid put that money into a separate low- or no-fee bank account that has a debit card."

She recommends writing the words "groceries only" in bold letters on this card, so you are reminded what it's for. 

"You should check from time to time to make sure you are putting enough into your grocery 'bucket,'" she said.

Unrealistic' time frames and restricting enjoyment are budgeting mistakes

An audience member asked what budget-related mistakes the experts saw people make?

Ms Stewart says the three most common mistakes are:

1. Having a budget that is unrealistic and destined to be difficult to achieve

For instance, saving $8,000 by the end of six months.

Not only are budgeting goals like this vague, they can be unrealistic and difficult to achieve given the changing pace of *wildly gestures* everything.

Your own situation will never be the same as the next person's.

Make sure you consider your personal lifestyle, values and money goals when developing a budget. 

2. Having a budget that requires too much time to track and maintain

As mentioned above, Ms Stewart says "bucketing" is one solution to this.

Each time you get paid, put money aside in a separate account that you will need for regular bill payments, such as rent, phone, health insurance etc. You should also set up automatic payments for these.  

3. Not budgeting for a bit of enjoyment 

Ms Stewart says people should accept that they are likely to have a bit of a splurge every now and then, and that's normal.

Whether it's going out for a meal or buying clothes, your budget needs to accept this, while still putting a limit on it.

"I cap mine at 10 per cent of my net weekly income, which is not much but it works for me," she said. 

Set the AC to 18-20 degrees Celsius in winter and switch off consoles to save energy 

Ms Stewart says there are a lot of ways you can reduce your energy usage:

  • Set the temperature on your air conditioner to 18-20 degrees Celsius in winter
  • Turn off computers and game consoles at the wall when you are not using them
  • Switch to low-energy LED lighting. Some state and territory governments are offering discounted energy-efficient lighting for renters, but you'll need to check with your landlord
  • If you can, replace old, inefficient appliances with new energy-efficient ones. Your state or territory government may offer a rebate or discount if you do this
  • Check that you are on the best plan and that you are receiving all the energy rebates and concessions you're entitled to from your state or territory government

Save on groceries by unit pricing and regrowing bought vegetables  

Many of you wanted to know how to save on groceries, particularly when you're on a vegetarian diet. 

Stewart suggested unit pricing. It's not as scary as it sounds. 

"Unit pricing is a great way to compare different brands but also different sizes," she said.

Stewart says bigger sizes tend to be cheaper, so can you buy some staples like rice or flour in bulk. As for the rest, you can opt for smaller units.

Ms Allen also recommended "regrowing" veggies that you have already purchased.

"Spring onions, potatoes and celery can all be regrown pretty easily," she said.

Kick off your savings by setting aside 10 per cent of your salary 

We had an audience member tell us she just started her first full-time job and wasn't sure what percentage of her salary she should be saving.

Ms Stewart suggested starting off with 10 per cent.

"You can always build it up from there," she said. 

"It's an option for when you're not sure where to start."

Struggling to manage debt? Consider consolidation or a partial waiver

We had an audience member tell us they had $78,000 of unsecured debt.

While they have financial hardship arrangements in place, they are due to end, leaving them struggling to make the repayments.

Ms Stewart says the options available to people in that situation depend on who their lender is and their personal situation. They include:

  • A long-term hardship variation whereby the repayments are permanently reduced and no further (or reduced) interest, fees and charges are added
  • A partial waiver, or debt reduction, and affordable repayments so you can repay the reduced debt in a reasonable amount of time
  • Consolidating debts, for example, a personal loan, credit card and home loan so your total repayments are lower
  • A combination of these and other measures

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Source: ABC News Australia

Silva, A. (2022, July 22). Want to save money and budget better? These are the key takeaways from our finance Q&A blog. ABC (Australian Broadcasting Corporation).