The smarter things you should be doing with your money
Australia has been transformed from a nation of spenders to thrifty savers, as households make the most of low rates and cheaper fuel to squirrel away cash, new research shows.
It’s a post-GFC trend that appears set to continue as households commit to paying down debt and saving money for emergencies. Almost half of the nation’s households are tucking away an extra $38 away a week, according to the latest ME Bank Financial Comfort Report.
And financial satisfaction levels are at a record high climbing by 12 per cent in the six months to December last year, it shows. Household savings have risen to $778 a month as more people focus on having a pool of cash available for a “rainy day”.
But the report also showed that almost 30 per cent of households are still living week to week and almost 60 per cent said they have less than $10,000 in cash savings.
It’s worthwhile looking at opportunities to create a buffer to protect against that rainy day scenario.
If you have a credit card debt you should always look at paying that down each month, clear any of your debt and think about reducing the card’s limit.
You can save on clothes and other items by dry cleaning to get more life out of clothes and buying clothes you can mix and match more readily with your wardrobe.
Conserve electricity and water by buying energy efficient appliances, turning them off at the power point when not in use, and using appliances such as washing machines and dishwashers only when they’re full.
You should also review your utilities, bank accounts and other fee hungry services. You may be surprised where you can shave costs by shopping around or simply just asking your provider how to reduce your costs.
Save on your shopping bill by sticking to your shopping list and buying in bulk, as well as recycling and reusing household items.
Also look at habits that regularly cost and see if you can replace them with something more cost effective such as:
- Give up drinking coffee or cut down on alcohol – it may sound scary but it will save you money and can have health benefits.
- Cancel your gym membership and walk to work instead.
- Make your lunch at home.
- Have people over for dinner rather than going out and ask everyone to bring a plate of food.
- Borrow books and DVDs from the library.
- Lock up your credit card for a month and only pay for things with cash.
- Set a limit for birthday and Christmas presents or give homemade gifts.
You should also focus on non-deductible debt, for example putting extra money on your home loan, and opting to tip excess money into your super fund.
Related links:
Tools to help you in the fight against hidden bank fees
Are you an impulse buyer? Here’s how to stop!
5 things money-wise people never do