There are three effective ways to build wealth: increase your income, save more money, and invest for future earnings. This article will focus more on how an ordinary Australian could cut back on their spending to save more money. Knowing when and how to save is a skill and discipline that, unfortunately, not everyone has. The more money you save, the more you can have the fund to pay off your debt, make big and important purchases, reduce your financial stress, and give you a sense of financial security and freedom.
As we go in-depth on the things you can do to cut back on expenses, it is crucial to understand how an average Aussie spends their money. According to research, Australians spend around $145 billion a year to maintain their lifestyle.
Here are the top three categories they spend their money on. If you know yourself to spend too much on any of these things, we also included some advice on how you can help yourself and save more!
1: Clothing and Shoes
Clothes and shoes are human necessities, and they are meant to be worn until they wear out. Australians are reported to annually spend $21.5 billion on this category alone, making it the number one on the list.
If you cannot help but make new clothing purchases each time, consider having a to-buy list when going to a store to shop and make sure to stick to it. Consider blocking online shopping sites on your desktop or mobile phones if you have no self-control. Not buying new clothing pieces or a pair of shoes each month can immediately help you save around $100 a month.
2: Dining In Restaurants
Enjoying delicious meals from various restaurants is the second category where Australians spend the most on. Eating out is a great way to treat yourself and a beautiful means to socialise with other people. However, we can’t deny that restaurant dining can often make quite a dent on your budget. Prices depend on where you would eat and how many courses you are going to have.
If you want to reduce your spendings in this category, you can always cook at home and invite your friends over. That way, you get to treat yourself to your favourite meal and surround yourself with the people you love.
Takeaway dinners and weekend brunch outings are almost as pricey as dining in. Swapping the purchased meals with home cooked and having a simple picnic at a nearby beautiful park could help you save quite a bit. You can even use the money you saved for adventures and experience, which will yield much more in terms of memories!
3: Cigarettes
Surprisingly, cigarettes are the third reason behind Aussies’ significant lifestyle expenses. If you are a non-smoker, then your wallet has a head start. If you’re never without a pack, however, you might want to think about your smoking expenses. According to statistics, Australia is the world’s most expensive country for a smoker. One pack of cigarettes would instantly cost you $25. Think of the $1,300 you would save if you stop smoking for a year! Your wallet—and your lungs—will thank you.
Conclusion
If you struggle with overspending on clothes, food, or cigarettes, it is time to think through your expenses and lifestyle choices. There is no wrong in treating yourself once in a while, but doing any of these regularly and without considering your financial situation could do you more harm than good. If there are simpler alternatives, try them first and see how much you can save with a little effort.
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