Managing Money: Five simple tips to take control of spending
The tips and tricks Australians can use to track their spending and stop the splurge
As cost of living pressures rise, Australians are being urged to take time from their busy days to get their finances on track.
A recent report from the Australian Bureau of Statistics which shows an increase in year on year cost of living for many Australians has prompted the Customer Owned Banking Association to prepare a series of recommendations for Australians looking to curb their spending.
COBA’s Director of Strategy Sally Mackenzie says that for many Australians the first step is track where they spend their money.
- Track spending for a month to see how much is spent on different items
- Develop a budget to manage spending; factoring in ‘big hit’ expenses
- Set money aside for saving, spending and rainy day
- Look for better deals than those provided by the current bank or insurance provider
- If appropriate, consider consolidating debts
“The first step to reining in spending is knowing what you spend your money on each month. It is surprising how little expenses like coffees and magazines can really add up.
“You can use the old school method of keeping track of all your expenses on paper, but there are now many apps that can make it easier, for example ASIC’s free TrackMySpend app on the MoneySmart website,” said Ms Mackenzie.
While tracking the usual spending patterns, it is also important to develop a budget in line with spending habits and bill cycles.
“There will always be the monthly recurrent costs like rent or mortgage repayments but there are the unexpected hits to the back pocket like a power bill or car registration that can take people by surprise.”
Ms Mackenzie said that once you have an idea of your outgoing expenses, it is easier to put together a budget.
“Creating a budget will help you manage your money so that you can cover the essential costs, but also know how much you have to save towards a big-ticket item or pay down debt faster.
“If you’ve got a well-planned budget, you’re more likely to be able to cover the ‘big hit’ expenses without compromising on your goals like saving for a home deposit, a new car or a holiday,” explained Ms Mackenzie.
Ms Mackenzie also recommended Australians look for small ways to save money without cutting back.
“There are a lot of options available for consumers outside the ‘Big Four’ banks. Visiting ownyourbanking.com.au can help you explore how challenger institutions can help you manage your finances,” said Ms Mackenzie.
COBA also recommends consumers turn to ASIC’s MoneySmart website for more tips and tricks to take control of spending and debt.