For many people and families, the cost of living in recent months has required making compromises to both lifestyle and budget to cover more of the everyday 'needs' and less of the 'wants'. Inflation accompanied by an increase in loan interest rates has placed a lot of pressure on the household budget and the money we had before is no longer stretching as far as it used to. If you're looking for tips on how to be smarter with your money, both immediately and in the long term, we've listed a few of our top tips to get you started.
Reassess your daily spending habits.
This tip might not seem groundbreaking, but if you take a step back and look at your daily spending habits you'll likely find a few areas you can easily cut back on and save instantly. Do you buy a coffee or your lunch each day? Perhaps you buy pre-packaged meals to save time or even splurge on take out multiple times a week? Are you buying bottled water? Or is there a route you can take that won't incur tolls?
What most of these have in common is forward planning. While a lot of us are time poor, forward planning can save you big bucks each week. Try to work out your snacks, drinks and meals before you grocery shop, or even pre-plan your transport so there are no last minute tolls or taxi rides to get you there on time.
Top tip: Try fuel apps for finding the cheapest prices near you, or downloading a money saving app that offers cashback rewards.
Buy in bulk
Buying in bulk is a simple way to save money in the long run. While the upfront cost to buy in bulk is higher, you'll notice the cost per unit is generally lower. You can easily buy in bulk at your usual grocery store or try Costco and Amazon for more options in larger quantities.
Some of the best items to buy in bulk are coffee, laundry detergent, toilet paper, paper towels, soap, nappies, vitamins, cooking spices and cereal just to name a few.
Buying in bulk doesn't just have to apply to household essentials. Consider what bills or subscriptions you pay monthly or quarterly and whether an option to pay yearly could be cheaper. For example, if you subscribe to Disney+ you may be paying $11.99 per month, but paying the yearly fee of $119.99 saves you almost $24. Similarly, Amazon Prime Video is $6.99 per month, but a yearly fee of $59 can save you almost $25. Applying this method to bills such as car insurance is also an effective way of saving money, just make sure you don't leave yourself financially strained in the short term.
Top tip: Only buy things in bulk that you will actually use, otherwise its not a good deal.
Review subscriptions and memberships
Speaking of subscription services, how many do you have that you're not using (think streaming services, audiobooks, mobile apps and games) or could you be just as happy using the standard service rather than paying for a premium experience (think Spotify, Youtube or your favourite podcast).
Do you have any memberships you're paying for but not using? While some of us are well-intentioned and continue to pay a fitness membership with the hopes of one day returning, if its been three or more months, then safe to say you might just be wasting your hard earned dollars. If you're confident you will get back into it, check if you're able to pause your membership in the meantime. Pausing memberships is also ideal when you're planning to go on holidays for several weeks – there's no point paying that weekly or fortnightly fee on something you're not using.
Switch to a high interest savings account or term deposit
With interest rates on the rise, take advantage of a high interest savings account or term deposit. A high interest savings account allows you to earn interest on the money in the account, encouraging you to save and grow your funds. The more money in your account, the more you earn on interest.
Find out more about our Bonus Plus Saver Account which gives you the ability to earn competitive interest.
A term deposit on the other hand locks away a set amount of money for a fixed period of time (the 'term') at a fixed rate so you know exactly what the return on your money will be at the end of the term. For example if you placed $5,000 in a 12 month term deposit with an interest rate of 2.6%, you would earn $130 in interest at the end of the term.
Get more out of your money with an Auswide Bank Term Deposit.
Check out our blog Terms deposit vs savings account: What's the difference? To learn more.
With a lot of individuals and families now restricted to a much tighter budget, it's important that you continue to pay yourself. This means ensuring you continue (or start to) pay a set amount into your savings each time you get paid to build up your financial well-being. As a rule of thumb, try the 50-30-20 budgeting rule which entails splitting your salary into three basic categories: 50% of your salary to be used for needs (such as groceries, rent or mortgage repayments), 30% for wants (such as eating out, events, or buying a new TV) and 20% for your savings, investments or debt.
Lower your laundry costs
Laundry costs might seem insignificant at the time you really need a fresh shirt, but making a few adjustments to your laundry routine can all help to save up those extra dollars.
- Laundry detergent can be expensive so try buying in bulk, on sale, or a cheaper brand that will do the job just as well.
- Use less detergent. Unless your clothes are significantly dirty, you probably don't need a full scoop or cap of detergent.
- Wash your clothes in cold water, rather than warm. Cold water washes just as well and will save you heaps on your next electricity bill.
- Skip the fabric softener. It's not necessary to add to all loads of laundry and can actually make your towels less absorbent. You could even try a natural alternative such a baking soda or distilled white vinegar.
- Hang them out when possible. A dryer can be extremely helpful on damp days, but if the weather is sunny and you've got some time, opt for air drying your washing instead of using the dryer.
Try second hand instead of new
If you're on Tik Tok or Youtube, you might have seen the resurgence of thrift shopping thanks to Gen Z. Browsing your local second hand stores is a great way to find vintage clothing, everyday basics or even a few gems that are worth more than they're marked. Second hand isn't all about clothing though. You'll often find home decor with character and beautiful vintage kitchenware all in perfectly good condition.
Like many other things, furniture has also become increasingly expensive and it can be hard to fathom forking out $200 plus per dining chair and $1,000 or more for a table. While there are some cheaper alternatives available they can also come with questionable quality. Instead, have a look on Facebook Marketplace, Gumtree or other local buy, swap and sell groups. With some luck and patience, you'll likely find something close to what you're looking for at a much more affordable price. Pieces can range in condition, but if you're happy to own something pre-loved or with a minor defect it could end up saving you hundreds of dollars.
Grow your own produce
We've all seen the outrage over lettuce that has been upwards of $12 in recent months, and lot of fresh produce has become more expensive due to a number of factors including floods and transport costs. Whether you're renting or own your home, growing your own produce can take up as much or as little space as you have to work with, it's cost efficient and can be a fun hobby if you have kids.
Top tip: Choose fruit and vegetables that grow quickly or are high yielding to ensure a continuous turnover of fresh produce.
Install a rainwater tank or solar panels
This isn't something that will work for everyone, but if you have the space and some funds installing a rainwater tank or solar panels are investments that will really help reduce your water and electricity bills in the long run.
Water tanks come in many different shapes, sizes and colours to work with modern housing and can be used to water lawns, wash cars, fill up your pool, or even used for your toilet and washing machine.
Like water tanks, solar panels will incur an upfront cost, but will save you thousand of dollars in years to come. In fact, with a large enough system, you'll be able to produce enough electricity to power your entire home with energy to spare. With electricity prices on the rise and incentives available to home owners, solar panels are a no-brainer for home owners as they will also add value to your home.
This information provides general advice only. We do not provide advice about this product based on any consideration of your personal objectives, needs or circumstances.