46 per cent of Australians experience ‘spending leakage’ and don’t know where their money goes.
If you’re managing finances on a fixed income, you most likely know exactly where every cent is spent. Yet 46 per cent of Australians experience ‘spending leakage’ and don’t know where their money goes. YourLifeChoices has some tips to help demystify your spending.
While most people who survive on an Age Pension or fixed income have cut out most of life’s little luxuries, cutting back on that second cup of café-bought coffee, the odd glass of wine and chocolates, could save about $3000 per year. If you’re one of the many Australians who think nothing of buying lunch everyday, but are confused when your bank balance is zero at the end of the month, our tips could help you get your spending back on track.
Keep a spending diary
Carry a small notebook with you everyday and decide over what period you’re going to track your spending. Mark down every cent you spend, even if you’re throwing a few coins into a charity bucket and at the end of your agreed period, work out how much you could have saved by cutting out unnecessary spending. If you’re fortunate enough to have a smartphone, then you can download MoneySmart’s TrackMySpend app and input the details of your spending directly into your phone.
Trawl your bank statements
No matter how careful you are, there are still ways to save money on your everyday banking. Take your bank statements for the last three months and highlight all the fees and charges which have been paid from your account. Those $2 for using other banks ATMs and transaction charges soon add up. Also, do you have any direct debits which you no longer require? Although this may sound unbelievable, you may have signed up to something, which you no longer use or can afford, (such as a charity, or subscription) when you were more flush with funds and haven’t gotten around to cancelling the payment.
Stop the café coffee
Sure it’s nice to catch up with friends for a chat over a cup of coffee, but if you do this just twice a week, it could be costing you $364 over a year, based on a $3.50 cup of coffee. If you have regular catch-ups, start a coffee fund and meet at each other’s houses.
Think about giving up
Consider if there is one thing you can do without. Maybe a weekly magazine or takeaway dinner? We’re not suggesting you stop enjoying life altogether, but if you can save the money you would normally spend on such items, you could find yourself with a nice little bonus at the end of the year. Saving $5 per week could net you $260 to enjoy on a small splurge.
Get what you’re entitled to
Concession cards can help dramatically with the cost of living. Make sure you’re aware of your entitlements and where around town you can get discounts. Apply for a Seniors Card if you’re eligible and contact your local government office to find out where you can make savings.