7 smart money-saving tips for financial fitness

As the end of the financial year approaches many families have saving money top of mind. Here, we look at how to save money and boost financial fitness – now and into the future.

We go for a jog, eat well and meditate to keep healthy, but we often forget to think about financial fitness and how to cultivate a healthy relationship with money. Look around at the average Aussie family: money matters are keeping us awake at night, with almost a third of Aussies feeling financially stressed.

Just like any significant stress, financial stress can affect our relationships and mental health. As the bills come in and the money goes out it comes as no surprise to most Aussies that – along with physical, emotional and intellectual health – financial health is a key element that impacts our overall wellbeing.

This year we’ve seen interest rates and the cost of living sky rocket, putting more pressure on our bank balances.

But as the financial year draws to a close, it’s a good time to take financial stock, reassess the family budget and start on the road to financial health and wellness.

Here are seven ways that could help to save you and your family money, and help you enter the new financial year with less stress and a more positive frame of mind.

Know your numbers

Taking stock of your current financial situation and setting priorities is a good way to meet savings goals in the lead up to the end of the financial year. A plan can also ease the feelings of financial stress, and make you feel more in control. Financial goal setting steps could include:

• creating a realistic budget that works for you. Try categorising your budget in terms of:

1) what money is coming in
2) what money is needed for essential things, like bills and rent
3) what’s left over that you can put toward saving or paying off debts

• using online budgeting tools like the Australian Government’s Moneysmart budget planner to help you make a realistic plan.
• actively talking to your partner about your finances. Two thirds of Aussies say that a lack of transparency when it comes to money and spending causes conflict in their relationship.
• setting financial goals, both short-term and long-term and seeking financial advice if you need it.

Reassess your utility bills

A good place to start is to evaluate how much your household is spending on utilities – whether it’s electricity and gas, internet or phone – and what you could be saving. Often, rate increases over the course of the year can slip by unnoticed – but can have a major impact on household spending.

Thankfully, there are ways to reduce your utility expenses. Do your research - there are certain online tools that can help you compare costs. It’s worth talking to your current provider as they might be able to price match or offer discounts, putting cash into your pocket without the trouble of switching providers.

You should also check if you’re eligible for government rebates. Depending on your circumstances, these are available to assist families, pensioners, concession-card holders and those experiencing financial hardship, among other categories. For example, the Family Energy Rebate helps eligible households with dependent children cover the cost of energy bills, if they have been receiving the Family Tax Benefit. And the NSW Gas Rebate helps eligible households cover the costs of natural gas.

Consider transport costs

The most significant component of the CPI increase in the year ending December 2021 was fuel, with prices growing 11% over the 12 months prior. Since then, these have spiked to record highs across the country: the Australian Institute of Petroleum estimates that fuel prices rose nearly 25% between April 2021 and April 2022. Bottom line: dropping the kids off at school, getting to work and running errands has become a whole lot more expensive.

If you rely on a car day to day, consider ways to reduce your fuel consumption, like sharing a lift with a colleague, using fuel vouchers, applying for toll relief or monitoring petrol cycles, to find out the cheapest days to fill up. If you use your vehicle for work, you may also be able to claim certain tax deductions.

The alternative, of course, is public transport. Having been frozen during the pandemic, the cost of public transport is also back on the rise, expected to grow 4.2% on average over 2022. But that’s still far less than fuel. Plus, many Australians are eligible to receive government discounts – from students (including tertiary students) to pensioners to those living in regional Australia – as well as discounts on annual passes.

Take stock of your private health insurance

The end of the financial year is the ideal time to make sure your health cover is right for you and suits your needs, which may change at different stages of life. Consider these handy tips:

1. Regularly review your cover and inclusions as your health needs and life situation changes.
2. Use our extensive networks of hospital and extras providers around Australia to ensure a no or known gap experience for services included on your cover.
3. Make use of loyalty programs such as HCF Thank You for a range of offers and discounts that can save you on everyday items such as groceries, petrol and other essentials.
4. Find out about what health and wellbeing programs are available for free on top of your cover.
5. Consider the value you receive off the back of your cover. At HCF, for every dollar our members paid in premiums, we’ve given back more in benefits than the industry average over the past 10 years*.
6. Explore a range of financial hardship options to ensure you can maintain your health cover during difficult times.

Check your deductions

Depending on your situation, you may be eligible for more tax deductions than you realise. This is particularly relevant in 2022, when many Aussies have spent a significant amount of time working from home. If you fall into this category, you may be eligible to claim some of your expenses – like electricity, internet, office equipment, home insurance and phone bills.

There are eligibility criteria, and things you can’t claim – like that morning coffee or the laptop your employer purchased for you. Do your research, and talk to a tax accountant to make sure you’re getting the savings you’re entitled to.

Manage debt

The Australian Bureau of Statistics reports that 75% of Aussie households have debt, with an average debt level of $203,800.

Consider strategies to reduce the amount of money you’re spending on your debts. Debt consolidation is the rolling of all debts into one single new loan, which can lower interest rates and make payments easier to manage. There can be drawbacks to this strategy, so it’s worth talking to a financial adviser to see how it can best work for you.

It's also a good idea to talk to your bank to see if they offer financial support if you’re experiencing financial hardship, as this could see you save in repayments over the long term.

Think ahead and consider voluntary superannuation contributions

Voluntary super contributions can be a tax effective way of boosting your retirement savings and investing extra cash at the end of the financial year.

These additional contributions can take many forms, from salary sacrificing to spousal contributions to personal contributions. And, you may even be eligible for a government co-contribution.

It’s worth doing your homework or talking to a financial planner to make sure you’re maximising your savings and know the limits (contribution caps) when it comes to paying extra into your super fund each year.

With a small investment of time – plus a little assistance from tools and advisors – you could enter the new financial year stressing less about your finances, with more cash in your pocket, and a stronger position for the future.

By Natasha Dragun
Published June 2022