Fabulously frugal ways to make a budget (without busting your lifestyle)

We all know there is a cost of living crisis out there, but Carolyn Tate has come up with ways to beat rising costs (without turning into a Scrooge). Here is the simple way to budget so you can continue to live well.

By Carolyn Tate

Smarter budgeting = better outcomes

Managing your household budget effectively becomes increasingly important as we start to get older. With factors like retirement planning (or even just retirement), potential increase in healthcare and other expenses, and possible uncertainty in our economic future, we start to see just how important it is to squeeze as much value as we can out of each and every dollar.  

But some smart budgeting can go a long way towards ensuring we’re financially secure, and ready for whatever life throws at us next. With a bit of careful planning and some savvy financial decisions, it’s doable to make the most of your income, save for the future, and enjoy a comfortable lifestyle.

Here are 12 cost-saving tips to help you maximise your household budget and achieve your financial goals.

1. First, make sure to have a budget

If you’re already across this one, you get a gold star! But if you don’t have a budget, start by creating one that outlines your income and expenses. Understanding your financial picture is the first step toward effective money management. The Australian Government moneysmart website has a simple but effective budget template you can use. You should also check your getting all the benefits and entitlements for your age and financial circumstances.

2. Prioritise essential expenses

Identify your essential expenses, like mortgage or rent, utilities, groceries, and healthcare. Those are your non-negotiable expenses that you need to cover before you spend on anything else. Make sure you’re putting enough money aside for those every month to avoid unnecessary stress. Use Citro's spending tracker spreadsheet to keep track - simply copy the spreadsheet to your own Google Drive and personalise each tab with your spending.

3. Cut unnecessary subscriptions

You might think this is a tiny gesture, but subscriptions can add up and cost us a lot of money if we don’t keep an eye on them. Review your monthly subscriptions and eliminate any that you no longer use or need. This could include streaming services, apps on your phone, magazines, or gym memberships. If you sign up to trials that automatically roll over into memberships, put a reminder in your calendar a few days before you’re due to be charged to review and decide if you want to continue your subscription.

Read 8 ways to reduce your internet costs and 9 hacks to lower your mobile bill.

4. Shop smart for groceries

Do a meal plan each week, make shopping lists, and look for discounts and sales. Buying in bulk for non-perishable items can also save you money in the long run, but only if you’re sure you’ll use the products. And you might want to check out your local produce markets to see if buying direct from the farmers can both save you money and give you better quality fruit and veg.

5. Reduce energy costs

Introduce some energy-saving practices in your home, such as turning off lights when you’re not in the room, sealing gaps on windows and doors, and using timers to turn off air conditioners or other appliances after a set amount of time.

Read 8 easy actions to save big on energy.

6. Refinance loans

If you have any high-interest loans, such as mortgages or credit cards, you may be able to save a lot of money over the life of the loan by refinancing. You can either do the research yourself or talk to a broker who can help you find the best deal for you. And set a calendar reminder for once a year to review and reassess your loans, so you can ensure you’re getting the best deal. Read Citro's story on the 7 ways to make debt disappear.

7. Reconsider dining out

While dining out can be a treat, it can also drain your budget significantly. If you’re looking for some easy savings, try to limit restaurant visits to special occasions and enjoy home-cooked meals more often. And for those times you’re craving something special but don’t want the big spend, supermarkets are now offering a lot of treats and ready meals that could hit the spot without the big bill.  

8. Review insurance policies

As with your loans, it can also pay to periodically review your insurance policies, including your car, home, and life insurance. Shop around for better rates or consider bundling policies with one provider for potential discounts. You can use a service to handle this for you, or you can shop around yourself. And if you see a better deal than the one you’re currently on but you don’t want to switch, try calling your provider and asking them to match the deal you’ve found.

9. Buy used and borrow where you can

Not only is buying second-hand cheaper, it’s also great for the environment to recycle – it can also be a lot of fun sifting through shops to find something you love. You might consider buying gently used items such as clothing, furniture, and household goods – usually at a fraction of the cost of buying them new. If you have items you don’t need, you could also sell them on platforms like eBay or Facebook Marketplace. And you may know that you can borrow books from your local council library, but you may also be able to borrow a diverse range of things like tools, cameras, musical instruments, and sewing equipment. If there’s something you need, try searching for that item plus “library” to see if you can find them, or ask in a local neighbourhood group if anyone can lend you what you need. People’s kindness may surprise you!

10. Automate savings

The easiest way to save is to automate the process. Try setting up automatic transfers from your regular bank account to a dedicated savings account, so it comes out before you even see it. Treating savings as another non-negotiable expense ensures that you consistently build your nest egg.

11. Use cash back and rewards programs

Take advantage of cash back and rewards programs offered by credit cards and retailers (including Citro). They can provide valuable savings on everyday purchases. If you don’t like the marketing emails or letters that come along with these types of membership, you can unsubscribe or opt out by following the instructions in their emails or letters. (But don't unsubscribe to Citro, or you might miss out on that next valuable tidbit to help you maximise your lifestyle while minimising your costs.) Read the 6 awesome cards and concessions to apply for.

12. Talk to a financial adviser

Nothing beats the personalised advice of a professional, so if you're unsure about your financial strategy or retirement planning, it can be helpful to talk to a reputable financial advisor about your specific circumstances. They’ll be able to provide tailored and personalised advice to help you make informed decisions so you can reach your goals.

Understand what moneysmart says you should know about finding the right financial adviser for you. Putting a little bit away pays dividends over the long term - read these 21 inspiring quotes about investing and the 9 foundations of building wealth.

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