Find out how to save money every day and make a savings plan to stay on track.
No matter whether you’re a highly organised saver or whether saving money feels like an impossible task, it’s worth doing an annual sense check of your money habits to make sure they’re working for you.
Here’s a suggested step-by-step plan.
Step 1: Know where your money is going
Before you work out how to save, it’s good to know what your money gets spent on.
So get ready to download your bank transactions for the past year and go through them line by line.
See track your spending for tips on how to do this and use our budget planner to put it all together.
Step 2: Look for ways to save
Some savings tips mean making lifestyle changes – but some don’t. Let’s look at the easy wins first.
Easy wins
There are some things that you have to spend money on – but you might be able to make them cheaper. Such as:
Electricity and gas
Compare energy suppliers to get the best deal. Use the Government's Energy Made Easy website. Or Victorian Energy Compare, if you're in Victoria.
If you don't want to change providers, phone your current energy provider and ask if they have a cheaper contract that would match your usage.
You can also try some behavioural changes, like:
- Heating and cooling – only heat or cool the room you're using. Open or close blinds to help control the temperature inside. Adjust your air conditioner to an energy-efficient setting. Block draughts to avoid leaking heat (for example, put a door snake against the door).
- Laundry – run your washing machine with a full load. Use cold water in your machine where possible.
- Appliances – use energy-efficient appliances or lights, if you can. Try to use appliances outside peak times when tariffs are lower (check your bill to see when it's cheaper).
- Turn off when not in use – turn off 'vampire appliances' at the wall, to avoid wasting energy. These include gaming consoles, anything with 'standby mode', and phones at full charge.
Insurance
The cost of insurance policies can vary by hundreds of dollars a year.
Whether it's home or contents insurance, car insurance, health insurance, life insurance or some other type of insurance, compare the costs.
Consider the different types of insurance you might have, that you can shop around for.
Before it’s time to renew a policy, get some online quotes from other insurance providers. You can then phone your current insurer to see if they’ll match the cost.
Ask for a discount when you group your policies (like car and home).
Look at more than price when you’re comparing insurance. It’s important to know what you’re covered for. For tips, see how to choose insurance.
Internet and phone
Check your monthly usage over a 12-month period and find a plan that suits your needs. You could be paying for more than you use, so look for cheaper options. Ask your provider to give you a better deal to stay.
Learn more about choosing a phone plan.
Debt
Whether you have a credit card balance, a personal loan, or some other form of debt, you’re probably paying interest.
Check the interest rate you’re paying on any loans/debt and see if you can negotiate a cheaper rate. Use our personal loan calculator to see how much you could save with a lower interest rate.
And if you can, make extra repayments towards any credit card debt or loans you have. Paying off your debts sooner can save you thousands in interest. For tips on how to prioritise and manage debt, see get debt under control.
Other ways to save
Other ways to save might mean changing your habits. Look at your expenses to see what you can change or where you could get a better deal. It may surprise you how little things add up.
Forgotten costs
Go through your bank or credit card statements carefully. Look for any costs that you’d forgotten about. This could be things like subscriptions or memberships you don't use much and don’t really need.
Grocery costs
Groceries are one of the biggest household costs. Savings tips include:
- Plan ahead – plan meals weekly, including lunches and snacks. Check your pantry, fridge and freezer. Make a shopping list and only buy what you need.
- Meal prep – prepare meals or ingredients in advance. Freeze extras for later.
- Buy on special – look for cheaper brands and special deals.
- Compare unit prices – check the unit price (for example, the price per 100g) under the main price. Then compare the price and value of similar products.
- Buy in bulk – buy staples (like rice, oats, flour) when marked down. Or buy bulk amounts with your neighbours or friends.
Extra costs
Also look for things that, when you add them up, are costing more than you’d realised. It could be things like takeaway, or streaming services, or even clothes.
There’s nothing wrong with spending money on things you enjoy. It’s just good to be realistic about the total cost, so you can prioritise.
Whatever you spend your money on, pause and ask yourself if you could get the same result, cheaper.
Step 3: Document your budget
Now that you’ve found some quick win ways to save, use our budget planner again to put it in writing. This will help you work out how much you can and want to save each fortnight/month.
Step 4: Set a savings goal
Setting a savings goal helps you stay focused. It doesn't matter how big or small your goal is, work out how much money you need and make a start.
Use the savings goals calculator
Step 5: Have a savings plan
The secret to saving is to start early and save often. Create a savings plan so you can manage your money and stick to your goal. Some suggestions for managing your savings habits are:
Separate your savings
Keeping your savings in a different account to your spending helps you keep track of it.
An online savings account is a great way to grow your money faster. Unlike a transaction account, you can’t spend money directly from a savings account. So it's harder to dip into your savings.
Automate your savings
Transfer part of your pay into your savings account. Ask your employer to do this for you, or set up a transfer from your transaction account. This way, you're saving without having to think about it.
Round-up transactions
Some savings accounts or apps let you round-up your daily spending to the nearest $1 or $5. The change then goes into your savings account.
For example, James buys a coffee before work each morning:
- The coffee costs $4.50.
- His transaction account is charged $5.
- 50 cents goes into his online savings account.
This adds $10 a month to his savings.