Healthy finances don’t just happen overnight. Bolstering your savings account and providing for the occasional ‘shock’ can take time and dedication, particularly if you’re starting from square one. A recent survey from the Australian Securities and Investments Commission (ASIC) found that 77 per cent households had a budget in place – but only 50 per cent admitted to sticking to it regularly.
Fortunately, you can pad out your savings at any time, and the easiest way to do this is to reduce your spending. This is something that can fall into the background as the pressure of home loan repayments and general living costs take centre stage, but it doesn’t necessarily mean sacrificing all the things that you enjoy. Here are three ways you can cut down your spending and breathe life back into your budget.
1. Save on electricity
Energy costs aren’t something that you can get away from easily. Not only is it a necessity in everyday life, but the rising cost of electricity and gas can put a bit of pressure on your finances. Fortunately, there are some simple ways to trim your energy bills down to size through even the smallest changes to your habits.
For instance, heating and cooling your home accounts for the largest proportion of your home’s energy use, according to Department of Industry and Science. Think about it this way: Each degree of extra heating in winter or cooling summer boosts your energy use by around 5-10 per cent. By simply turning down the thermostat, you can cut down on your regular energy use and trim your bills.
2. Be smart with your credit card
Credit card debt can slowly creep up on you if you’re not careful, but there are some clever ways you can reduce the costs of this. It might sound counterproductive, but to avoid paying late fees or additional interest on your card’s balance, it’s worth settling more the minimum repayment, and even setting up a direct debit to pay off the balance each month.
While it’s tempting to just pay what you need to, you can easily trim interest repayments and pay off the balance much faster – something that can help your finance stay in the black. If you want to reduce your spending on interest, then switch to a low rate credit card – our low rate Visa Credit Card at Police Bank could be just what you’re after.
3. Switch and save
Reducing your spending can often come down to smarter choices. Are there cheaper gym memberships you could consider? Similarly, are their subscriptions you can cancel or downgrade to a cheaper service? Even the little things, like mobile phone and internet plans, can make a large difference to your expenditure if you shop around for a good deal. According to ASIC, households spend an average of $12 a week on mobile phones alone – cropping this expense even a tiny bit could leave you with more in the kitty.
Reducing your spending doesn’t need to come at the expense of everything you enjoy, but compromise can go a long way. If you need help identifying where you can save money, give our easy-to-use Budget Planner calculator a try as well as reviewing our range of savings accounts.