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Savings are important because they can prevent you from having to take out high-cost credit to cover any sudden or unforeseen expenses – but it’s not always easy to pinpoint the best strategies to save money, as everyone’s circumstances, spending needs and budget constraints are different.  

One of the most important steps in taking better control of your money involves taking a real, honest look at the money you have coming in versus the money you have going out so you can work out a solid plan. From there, you just have to stick to it. 

It’s estimated that more than 40% of Australians don’t have enough funds to cover a $3,000 emergency. If you’re among those without a workable emergency savings buffer or your personal finances are otherwise feeling pinched, now more than ever would be a good time to evaluate how to improve your money management. 

Here are six easy steps to help you take better control of your personal finances. Once you’re feeling more stable, from there consistency is key! 

Here’s a quick list of the areas you need to cover, to more effectively manage your money: 

  • Income: Work out what you’re receiving/earning monthly. 
  • Expenses: Knowing how much you’re spending each month. 
  • Balance: Your expenses must always be less than your income. 
  • Save: Start putting some of your extra funds away for a rainy day.
  • Consistency: Stick with it. Budgets will only work if you follow them every month.
  • Monitor: Keep track of your money and your credit, so you can build a solid financial foundation for your future self.

1. Evaluate your income

How much money do you have coming in? Including your monthly paycheck is a given, but don’t forget any other income streams you might have. This can include side hustles, alimony, child support or any other funds that you might have coming in. Write them all down and add up the total.

2. Calculate your expenses

One of the first steps in working out a budget is determining how much money you’re spending each month. Make a list of your fixed expenses, which can include the following: 

  • Rent or mortgage payments 
  • Car payments 
  • Childcare expenses 
  • Any insurance payments you may have 
  • Utility, energy and water bills
  • Cable or other discretionary subscription services 
  • Other loan or debt payments, such as credit cards or personal loans 

Next, list down any variable expenses like food, transport and entertainment. Don’t forget about any miscellaneous and or regular maintenance expenses like property taxes/council rates, car maintenance/registration and birthday gifts. 

Once you’ve added up your outgoing monthly expenses, subtract them from your income. That tells you whether you’re spending more than you earn. You’ll also get a better idea of where you can cut back. Depending on how much your income and expenses vary over time (with any changes in circumstances, employment, moving house etc.), you may need to do this on a month-to-month basis.

3. Find spending areas to cut backon

One way to determine areas where you can cut costs is to categorise your expenses into your needs and your wants (or must-haves vs nice-to-haves). This can add a new perspective to your budgeting and give you the extra motive you need to reduces expenses that aren’t fixed needs. Other ways to scale back on your overall spending can include: 

  • Shopping around for options to find cheaper contracts with service providers 
  • Calling existing service providers to see if you change to a lower rate or discount 
  • Looking into budgeting apps that help you monitor monthly spending
  • Paying credit card bills fortnightly, rather than monthly, to stop your balances from climbing too high

4. Make sure you save – pay yourself first

Don’t forget to leave room to pay yourself. Setting aside enough money for an emergency fund can make all the difference in the world if you’re blindsided with an unexpected job loss or sudden emergency. Ideally, you should aim to have at least six months’ worth of expenses set aside in your emergency fund. Even having $1,000 as a backup is better than no backup at all – if you’re struggling and can only afford to set aside a bit each week, saving even $10 a week is better than nothing.

5. Stick to your budget

Sticking to a budget can be the most difficult part because it requires some will power. These tips below can help you stay in control of your money with stronger budgeting and decision making: 

  • Be realistic – you probably can’t save 50% of every paycheck, but work out what percentage is feasible for you to contribute on a regular basis. 
  • Plan ahead – planning for meals, outings and gift shopping can let you take advantage of deals and coupons so you pay less overall. 
  • Work together – get your family or partner involved. If you’re not all working with the budget, it’s harder to maintain. 
  • Auto-deduct your savings – pay yourself first by auto drafting a certain amount from your checking into your savings every payday.  
  • Pay with cash instead of credit – studies show that consumers tend to buy more when they use credit, in part because the psychology of spending feels different. 

6. Monitor your credit going forward

Keep in mind that having a good credit score and watching your credit debt can be instrumental when it comes to controlling your finances. It helps ensure you qualify for the lowest interest rates if you ever do need to borrow or take out a loan or mortgage. This can save you a lot in the long run – lower interest rates equal lower monthly payments, which makes it easier to control your overall budget. 



This article is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered Australian legal practitioner or financial or investment advisor.