A person who has just started living in Australia is financially vulnerable. It is more difficult to find a job for such people and they are more likely to lose their job as they are not yet completely adapted and have not learned the tricks. Thus, if you are living in Australia and especially in an expensive city such as Sydney, you must control and reduce your expenses as much as possible.

To me it even makes more sense to shrink my expenses as I believe that $2000 reduction in my expenses is equal to $5000 pay rise because when we get a pay rise we actually give a big part of it to the government as Tax. But the hidden income that you gain through reducing your expenses is not taxable!

What can we do to save the money that we have earned by working hard?

• Each time you are about to spend some money, remember that how hard you have worked to gain it. Remember that how much you hate your boss, but you have to smile at him/her because you must keep him/her happy!

• Always live on a certain budget. This budget must be logical and be enough for the living standard that you want to have. Many people can live on a low budget by wearing really cheap cloths and eating bread crumbs! But for many of us it is not the life that we are after. Therefore, we must think and decide what level of living standard we want to have. Then, we must do some math and calculate the amount of money that we need for a week or a month. For example, my weekly budget can be like this:

Item	Budget
Rent/Mortgage	$400
Bills	$200
Groceries	$150
Recreations	$100
Total	$850

 

When you are paid, keep your weekly or monthly budget and save the rest in a saving account or invest it in something secure (e.g. buy shares). By doing this, not only you will use your money more wisely, but also you will not spend it on buying fancy but unnecessary stuff!

• Buy the groceries that you really need. Each time that I go to a supermarket (e.g. Coles) I have a shopping list with me. I never buy anything that is not in that list. If you go to a supermarket without a clear list of the items that you have to buy, you will end up buying so many things that you don’t really need. Especially if you are hungry, you will pay heaps of money on buying biscuits, chocolates, fruits and nuts! So have a shopping list at home, or eve one of those free shopping list apps on your iPhone, add the name of the things that you really need at home and do your grocery shopping based on it.

• Shop online.When you buy a product from a store, you are not paying your lovely money just on the good. You are actually paying your money to help the shop owner to pay his rent, and his bills and the wages. If you shop online, you will not have to contribute in paying the expenses of a shop. If you shop at eBay, you will be able to find really good deals because due to the currency exchange rate, you will be paying a few bucks to buy something good. Last year, I needed a tripod for my camera. I had to pay $140 to buy it from a photo store in Sydney but I bought (almost) the same thing on eBay just by 9 dollars! It’s a huge difference isn’t it?! I have bought so many tings from amazon.com, eBay.com and other trust worthy web sites and through that I have saved a good money.

• Shrink your bills. Bills are a big source of expense to me. They look like a big hole in my pocket! During the month I am receiving bills for mobile, Internet, electricity, natural gas, home phone and etc. Before you find yourself trapped in a contract, such as a home phone or mobile contract, think twice. Think that do you really need a home phone? Think that if your mobile plan has plenty of data on it, can’t you use it at home and avoid buying ADSL?  Can’t we send SMS and avoid long and expensive mobile calls?

      It is really important to read every contract and fully understand it before you sign it. For example, make sure that you will not be charged for excess usages. Or what you are buying is enough so you won’t have excess usages. Also, before buying a mobile plan think that do you mostly have to make calls or send texts? then buy the proper plan so you will not end up paying exit fees to cancel your current contract.

• Consume less energy. Energy, especially electricity, is so expensive in Australia. In my first Australian winter I kept a 2000-WATT heater on during the night. It felt good because I could sleep well but I still feel dizzy when I remember a $700 electricity bill that I received for only a 50-day billing period. What I do to save electricity is to turn off the hot water system and just turn it on when I need to have a shower. Or keep unnecessary electronic devices REALLY switched off (they consume energy even if they are in stand by mode).

• Use public transport. Taxi is very expensive in Australia.  For a short ride you will probably have to pay around $10 to $20. Personally, if I catch a cab to take me home from Central Square (in Sydney), I will have to pay $20. If I use a bus, I will only have to pay $1.6 (assuming that I buy a weekly ticket). As you see there is a huge difference. When you repeat using a cab, this money will be accumulated and will become a big money at the end of the year. In so many cases, we use a cab only because we don’t feel like to wait for a bus. Or because we are running late. If I have to be somewhere at a certain time, I head off early so that I can use the public transport with peace of mind. 

• Recreation is a big culprit! Having a bit of fun can be very expensive in Australia. For example, if you go out for a dinner with your partner you will have to pay around $50 to $200. Wouldn’t it better if you cooked a nice dinner and had it at home!? Or, if you go to cinema you will have to pay for the tickets, snacks, the dinner afterwards, and the taxi that you will have to catch to go back home. Wouldn’t it be better if you rented a DVD from Block Buster and watched it at home? It is good and even necessary to go out for concerts, dinners and things like that occasionally, but doing it on a regular basis will push you in debt!

• Having and maintaining a car is very costly. Think twice before buying a car, because not only buying a car will make you pay several thousands of dollars, but also maintaining it will cost you an arm and a leg. Every year you will have to pay heaps for the registration, third party insurance, comprehensive insurance, periodical services, parts, carwashes and so on. Think well to see if you really need a car? Do you really need a brand-new car?! If you buy a brand new car, you will lose one forth of your money (that you have paid to buy the car) as soon as you pick up your car from the dealer! One good strategy, if you have friends, is to rent a car and share it. For example, if you want to go out on the weekend, rent a car and go out with your friends or neighbors and share its expenses. There are also companies that allow you to hire a car and pay on an hourly basis. Such as www.flexicar.com.au. If you need a car for a few hours, it makes sense to do it.

• Stop your costly habits. There are some habits that cost us a fortune. For example, many of use buy a cup of coffee every morning. Sometimes we have morning and afternoon coffee including a muffin! Do a math and see how much money you are paying on unnecessary takeaway coffee and cakes as well as eating breakfast and lunch out. If you stop doing it, not only you will save your money but also you will stay healthier.

• Do your labor work. Are you spending money on hiring someone to clean your house, mow the lawn and maintain your garden?

Are you spending money on carwash or minor car repairs? With some effort you will be able to do all these things by yourself and save a great money. House cleaning, plumbing, carpeting, gardening and other jobs like them are so expensive in Australia. You might have to pay $500 for a 2-hour work, or $150 to get your place cleaned. If you do them yourself, not only you will keep your money for yourself, but also you will do some exercise, which is good for you. After all,it might even turn to a hobby.

• Avoid loans. Banks are living based on the interest that they get from their customers. In many cases we get a loan or finance without even needing it. For example many of us might have $10,000 cash, which is enough to buy a used or small car. But, since we love to have a big and brand-new car, only because it will make our friends jealous or will help us look  a rich guy, we get loans and will have to pay twice more back to the bank. Each time I am about to buy something or I think of a loan, I think to me that do I really need to do this, or is it just the sinister greed that solicits me to do so?!

• Analyses your expenses. If you don’t know where your money goes to, you will not be able to control it. If we manage to record every item that we pay money on it, and analyze this data at the end of the month, we will realizes that what we spend our money on the most and we will go for fixing it. There are several good, free and easy accounting software on the Internet. Download one of them and use it to keep track of your expenses. I personally like an application named Home Bank. It is easy and free and also tells me on what items I am wasting my money?

If you think, you will even find more ways to save. Just as I said before, don’t over do the saving thing or you will be accused of being stingy