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Complete Budget Guide to Day-to-Day Home Expenses

May 24th, 2019

Did you know that Australians are some of the biggest per capita spenders in the world? In 2016, we spent almost $700 billion dollars on household expenses – that’s almost $4 million dollars every three minutes, and around $80,000 per year per household! More frugal states like Tasmania and South Australia spend around $1200 per week per household, while their Northern Territory counterparts average a whopping $1700 every week.

Unsurprisingly, the largest part of our household expenditure is allocated towards rent or mortgage repayments. The next largest expense is food and drink – Aussies are known around the world for our love of good food so again, no surprises there.

Interestingly, holidays and recreation come in as a close third place. The other big expense is transport. Getting around in this big country is never easy, and it seems like the expenses associated with car ownership are only getting worse.

Looking at Australian household expenditure, we realised that there are so many quick and easy ways to save money that we just can’t help but share them. So dig in and pull out a notepad – this comprehensive guide to day to day home expenses is guaranteed to save you your hard earned money, from your commute to your grocery shop and your power bill.

Grocery shopping on a budget

Meal prep can help you save

As we noted earlier, the second biggest expense that Australian households face after housing is food and drink. Though food and drink are (definitely) an integral part of our lives, they don’t necessarily have to be expensive. And while splurging for a nice meal every now and then is a great treat, a lot of us tend to spend way too much money, mainly due to lack of preparation. You might plan to whip up a vegemite sandwich before work, often, hectic schedules can get in the way, making it super difficult to avoid those expensive lunchtime splurges.

The trick to avoiding these costs is meal planning. By planning your meals ahead of time, you can take advantage of a number of cost saving measures, and save time and energy in the process. The best part is, if you plan ahead, your food will often be healthier and tastier to boot (though no one’s stopping you from choosing to lunch on home-made brownies every day…).

Weekly planning for meals

The easiest way to get into meal planning is to start by drawing up a schedule of weekly meals. Ideally, you want to pick menu items which are relatively easy to prepare, and that you are already familiar with. Try and avoid recipes that call for too many specialty ingredients or really long and complex procedures, as this will only discourage you and waste valuable time.

In addition, try and plan meals that keep well and can be double portioned. That way you can have the same meal two nights a week, or eat the leftovers for lunch the next day.

That being said, variety is the spice of life. Keep things mixed up, and periodically change up the menu. This will stop you from getting bored of your food, and making that expensive lunchtime trip down to the local sushi train.

Setting a limit for weekly spend

Once you have some meals planned, figure out how much you’re able to spend at the store. A great way to quickly figure out the total cost of your groceries is by using online shopping. Most major Australian supermarkets now offer an online option, with the ability to pick up or even deliver. This will allow you to figure out what your weekly grocery basket is going to cost, and save you the hassle of wandering around the aisles with a calculator in hand.

It’s important here to note that your budget needs to be strictly adhered to. If the recipes you have chosen are too expensive to make, go back to the drawing board. It’s often possible to substitute expensive foods for less expensive ones, particularly with animal products like meat and fish.

Tips for saving money while shopping

So, you’ve decided what you’re going to eat, and where you’re going to get it. Now, how do you maximise your savings? This is a little bit trickier, as taking advantage of sale items and other promotions involves a bit of flexibility.

For many recipes, the substitutions are obvious. If the meal calls for pork mince, but chicken mince is on sale, then this will most likely be fine. Same goes for things like potatoes and other starchy vegetables.

To really maximise your savings, consider checking out budget supermarkets like ALDI that offer great deals on staples like rice and pasta.

Finally, consider using store rewards cards to make the most of every purchase. Most major supermarkets offer these nowadays, and the savings can be quite significant in the long run.

Budgeting for electricity and bills

The news has recently been full of stories about rising power prices and the impact they are having on Australian households. Soaring demand and the looming spectre of climate change, as well as a lack of consistent energy policy, has resulted in a situation where there is a lot of uncertainty, and very high prices.

While this might sound bleak, there are a lot of ways that the average household can radically reduce their power bill.

How much are you really paying?

Surprisingly enough, many Australians don’t actually have a good idea of how much their usage is costing them. Most utilities companies bill on a quarterly basis, which makes it difficult to develop a clear picture of our usage patterns over time. Furthermore, power generation costs fluctuate over time – resulting in some very unexpected power bills. Managing this uncertainty is the key to budgeting effectively.

On average, Australians spend roughly $48 per week per household on fuel and power. The average single Australian under 35 spends about half that, at $24 per week.

While this might seem like an insignificant amount, it equates to almost $2500 per year for a couple with children, or $1250 for a single person.

In order to ascertain exactly how much you’re paying, refer to your previous bills. Most utility providers now give you access to this data through their online portals, making it easy to figure out.

And what can you afford?

If you’ve ever been shocked (excuse the pun) by an unexpectedly large power bill, then you are probably not implementing energy-efficient measures adequately. While a certain level of expenditure is of course unavoidable, trying to establish a weekly usage goal is very desirable.

If you notice that you’re routinely exceeding your electricity budget, you can take steps to reduce your usage. Furthermore, having a weekly amount set aside for your electricity bill will prevent you having to dig into your savings further down the line.

Tips for saving on your bill

The easiest way to save cash on your electricity bill is to reduce your power consumption.

Little things that can save a lot of power over time:

  • turning off lights when you leave a room (not just when leaving the home).
  • reducing your shower time (if you have an electric water heater).
  • using the clothesline instead of the dryer, or if you’re in an apartment get a clothes horse.

Bigger things that can save even more power:

  • When you are replacing older appliances, shop around for the most energy efficient models available.
  • Opt for LED light bulbs – they are becoming increasingly popular and affordable, they use even less power than CFL and halogen bulbs, and they last much longer.
  • If you own your own home, look into getting solar panels installed. Australia is a sunny country and, over time, panels can quickly pay for themselves, both in savings and by feeding power back into the grid.
  • Try shopping around for a new power provider. Many electricity companies are very competitive when it comes to attracting new customers, but be warned – lock-in contracts can leave you paying more in the long run, so don’t be afraid to shop around and negotiate.

Budgeting for car expenses and running costs

For most of us, owning a car is a central part of our lives. Getting to work, getting to the shops and getting away for a quick break are all pretty hard to do outside of the city CBDs unless you have access to a set of wheels – and the money that goes into keeping them on the road.

While car ownership is definitely expensive, it doesn’t have to be unaffordable – particularly if you budget accordingly.

What does owning and using a car really cost?

When most people think of car expenses, their minds instantly jump to fuel. While fuel is definitely a large element in the total running costs of a car, it is by no means the only cost. Things like rego, insurance and servicing are ongoing ‘fixed’ costs – that is to say, they are more or less unavoidable. However, it is certainly possible to reduce these costs in a way that will leave your wallet smiling.

Insurance

Insurance is mandatory in Australia, and a lot of car owners choose to go above and beyond the mandatory minimum level of cover. This is a good idea, particularly for inexperienced drivers, or people who rely heavily on their car and just can’t afford to see it out of action.

However, insurance is costly. Thankfully, there are a lot of services out there for comparing insurance quotes, helping you to get the lowest premiums possible.

Shop around, don’t be afraid to ask questions, and read the PDS (Product Disclosure Statement) of any insurance product that you are interested in. This information is valuable – you need to know what you’re covered for, the size of excesses and most importantly, the total cost.

Services

Servicing your car is also a necessary cost in order to avoid more significant maintenance costs further down the road. While nothing can beat the steady hand and experienced eye of a professional mechanic, there are a lot of routine maintenance tasks that are actually pretty easy to DIY. Learning to change your own oil and fluids, as well as diagnosing simple to fix problems like battery issues or tyre wear is really easy. Youtube is a great resource, and mechanics workshop manuals are often available online for an affordable cost.

If you don’t like getting your hands dirty, then it’s a good idea to find a mechanic who is affordable. Most shops will do quotes over the phone for basic services, so do your research and check out the workshops in your local area. You never know, you might end up saving a lot!

Registration

Car registration can be seriously expensive, but thankfully, you only have to do it once (or maximum twice if you opt for 6 month registration) a year. Setting aside a small amount of money each month is a good way to ensure that when the letter from the RMS turns up, you have ample cash reserves to pay for it.

In NSW, you can offset some of the cost of your car registration if you spend more than $25 per year on tolls.

Finally, some electric and hybrid vehicles are eligible for reduced registration, so if you’re in the market for a new car, this might be a great option.

On-road costs

In contrast to the fixed costs of car ownership, there are a lot of ways to reduce your bill when it comes to keeping your car on the road. Simple measures like adopting more economical driving practices and shopping around for petrol may save you literally hundreds of dollars a year. Did you know there are a number of great apps and websites for comparing petrol prices in your area, that are particularly useful for people with long commutes? For example, the NSW Government offers a ‘Fuel Check’ website to show the petrol prices around your area.

Of course, the best way to cut down on these costs is to use your car less. Taking advantage of public transport, or walking more, are both really easy and straightforward ways to save on petrol and tyre wear.

Finally, some car related expenses can be claimed on your tax, particularly if you drive your car as an essential part of your work. It is recommended that you consult with your registered tax agent to see what rebates you might be eligible for regarding your car.

Budgeting your day to day has never been easier

Ultimately, the best way to save money on your day to day expenses is to think harder about where your money is going. Take control of your finances and make sure that you have savings strategies for every aspect of your financial life, and you’ll be rewarded with a healthy bank balance and an absence of financial stress.

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