As a place to live, Australia ranks comfortably in the top 10 countries worldwide. But, living in the land down under is not cheap.
Housing is amongst the most expensive in the world, and globally: transportation is the third most expensive, and with recent inflation, food has been rising by 7.5 per cent a year.
So how can the average person find money left over to get ahead, have a bit of fun – and most importantly – to invest?
Well here’s something to think about.
If you were to save less than $100 a week – or $5000 a year just in a bank account every year for 20 years at a compound interest rate of five per cent – you could comfortably accrue close to $180,000. Imagine what investments that would be possible then.
There is an approach, and it may be old-fashioned – but it can still work. All it’ll take is a bit of commitment to saving.
Here are twelve simple ways to save money in Australia!
1. Create a budget
Figure out how much you spend and keep track of all your expenses – every coffee, every grocery purchase and every trip to the petrol station – along with your regular monthly bills of course. Once you know what you’re spending, you’ll see where there might be opportunities to save a portion of your monthly earnings.
2. Keep track of expenses
Having a plan is one thing but setting it in motion and sticking to it is the challenge. Record your expenses on paper, a spreadsheet – or use an easy-to-use app.
3. Cut unnecessary expenses
Identify non-essential items or services to cut from your monthly budget: unused subscriptions, dining out, and avoiding unnecessary shopping sprees. If you have a gym membership you rarely use, consider cancelling it and opt for free or low-cost fitness alternatives such as outdoor walks and runs, home workouts or community centre activities
4. Set savings goals
Think about what you want to save for, be it in the short-term (one to three years) – say for a holiday – or longer term (five years or more), for a house or unit deposit.
5. Shop smart
Compare prices, buy by the specials, use loyalty and discount vouchers and where possible, buy in bulk. Look for cheaper cuts of meat, buy fruit and vegetables that are in season and remember that the cheaper supermarket brands can help you save.
6. Meal prep and cook at home
Eating out is usually more expensive than cooking – especially for couples and families. Not only is home cooking cheaper, but it also gives you control over the ingredients you use and the portions you eat. Leftovers can be frozen for later and can save you from buying lunches.
7. Cut down on alcohol
Cutting down on alcohol can save your health and your money. The average Australian spends $32 a week on alcohol. That adds up to $1664 a year. And of course, quit smoking too.
8. Use public transport or carpool
Parking in cities is expensive, let alone the cost of fuel and your vehicle’s wear and tear. Where possible use public transport or carpool with others in your area. This will not only save you money, but you can feel good that it’s also great for the environment.
9. Save on energy bills
Switch off lights and standby lights around the house when you can, and unplug devices when not in use. Heaters and coolers tend to be particularly energy-thirsty. Your electricity provider will have more information and tips on how to cut down on your power bill. Solar power is also worth a shot.
10. Open a savings account
If you don’t have one already, your bank can help you set one up. Unlike a debit account which most people tend to use and abuse, a savings account is used as a tool to help you put money aside. It’s a deposit account specifically designed for saving cash. If you have a home loan, an offset account can also be a good way to watch savings grow, whilst reducing the amount of interest you pay on your mortgage.
11. Reduce water usage
Install low-flow shower heads and taps around the house. Fix any water leaks promptly and use water-saving practices such as turning off your taps while brushing your teeth. Wait till you have a full load before you do your laundry.
12. Look at your communication plans
Will a phone and home internet bundle be cheaper than separate plans or pre-paid? Browse around, and find the optimal bundle.
By implementing these super simple, yet effective strategies, you can start putting some money aside and start achieving those goals even amidst inflationary headwinds!
And as Warren Buffet once said:
“Do not save what is left after spending, but spend what is left after saving.”
Warren Buffet