Let’s face it: in today’s Australia, it can feel like your money disappears faster than a sausage at Bunnings. With the cost of living rising, bills stacking up, and the price of a cuppa threatening to outpace petrol, it’s no wonder many Australians are feeling the financial squeeze.
Yet, have you ever noticed that some people seem to glide through every economic storm, never stressed about money, while others are left scrambling for coins in the couch cushions?
It turns out that the difference isn’t always about earning more—it’s about living smarter. According to investment expert Fred Harrington, the everyday habits of frugal people keep them out of trouble and on the path to financial freedom.
And the best part? These habits are simple enough for anyone to adopt, no matter your age or income.
So, what are the six golden rules that keep the financially savvy from going broke? Let’s break them down, with a few extra tips and Australian context thrown in for good measure.
1. Pay yourself first—no excuses!
Before you pay the power bill, buy groceries, and treat yourself to a cheeky takeaway, set aside a portion of your income for savings.
The ‘pay yourself first’ rule is the cornerstone of every frugal person’s playbook. Even if it’s just $50 a month, it adds up—$600 by year’s end, to be exact.
Why does this work? Because if you wait until the end of the month to save what’s left, there’s usually nothing left!
By making savings your top priority, you force yourself to live within your means. It’s like hiding the Tim Tams at the back of the pantry—you can’t eat what you can’t see.
2. Build an emergency fund—your financial lifesaver
Life is full of surprises, and not all of them are good. The car breaks down, the washing machine breaks down, or you suddenly need to help a family member.
That’s where an emergency fund comes in. Aim to stash away enough to cover three to six months of essential expenses. If that sounds daunting, start with $500 and build from there.
Having this buffer means you won’t have to reach for the credit card (and rack up interest) when life throws a curveball. It’s the difference between a minor setback and a full-blown financial disaster.
3. Track your spending—but don’t obsess
You don’t need to become a spreadsheet wizard or log every cent, but it’s crucial to have a clear idea of where your money goes.
Whether you use a simple notebook, a budgeting app, or the back of an envelope, tracking your spending helps you spot leaks—like that sneaky streaming subscription you forgot about, or the weekly café visits that add up to a small fortune.
Once you see the numbers, it’s easier to make changes. Maybe you’ll swap a few café visits for a homemade brew or finally cancel that gym membership you haven’t used since 2019.
4. Resist lifestyle inflation—keep up with yourself, not the Joneses
It’s tempting to upgrade your lifestyle whenever you get a pay rise or windfall.
But frugal folks know that the secret to building wealth is to live like you’re still on your old income and save or invest the extra.
That means resisting the urge to buy a flashier car, move to a bigger house, or splurge on the latest gadgets.
Remember, every time your expenses rise to match your income, you’re robbing your future self. The real winners are those who keep their costs steady and let their savings grow.
5. Shop with a list—and stick to it
Ever popped into Woolworths for ‘just a loaf of bread’ and come out $80 poorer? You’re not alone. Retailers are experts at tempting us with specials and impulse buys.
The frugal solution? Always shop with a list, and don’t stray from it. This simple habit keeps you focused on what you need, not what’s cleverly placed at eye level.
Bonus tip: Never shop when you’re hungry. That’s when the snack aisle does its worst damage!
6. Automate your finances—set and forget
What is the best way to ensure you stick to your good habits? Automate them! Set up automatic transfers to your savings account, schedule bill payments, and even automate your investments.
This way, you remove the temptation to spend money that should be saved, and you’ll never miss a payment (or cop a late fee) again.
Think of automation as your financial assistant—one that never takes a sick day or forgets to do its job.
Harrington puts it best: ‘It’s not about perfection, it’s about consistency. Small daily choices compound over time.’
Skipping a daily coffee might only save you a few dollars, but over a year, that’s enough for a weekend getaway or a healthy emergency fund.
The key is to start with one habit, master it, and then add another. Before you know it, your whole financial picture can change.
Do you have a money-saving habit that’s helped you stay afloat? Or maybe a cautionary tale about a time you let lifestyle inflation sneak up on you? Share your tips, stories, and questions in the comments below.
Also read: Ready to take control? ANZ launches new tool to boost your money skills
