Oct182025
NewsSave Money

Before diving into techniques to save money, it’s worth pausing on why saving—even modest amounts—makes a difference.

  1. Psychological and mental-health benefits
    People who practice stable financial behaviours (such as regularly saving and paying off credit card debt) report better mental health, vitality, social functioning and general wellbeing. In short, saving reduces financial stress, gives you breathing room, and contributes to emotional stability.

  2. Beating “overspend drift” in Australia

    Many Australians have good intentions, but struggle to stick to them. According to a snapshot of Australian saving behaviour, while 68% of Australians report having saving goals, more than 37% say they don’t always follow through.

  3. Compound impact over time
    The earlier you start—even with modest amounts—the more time your savings (or investments) have to grow. This principle underlies many behavioural strategies (e.g. “save more tomorrow”) used to encourage consistent saving.

Thus, saving is not about being perfect or maximising returns overnight—it’s about building consistency, reducing risk, and giving you options.

Principle #1: Start Small and Be Disciplined

One of the most significant barriers to saving is thinking “I need to set aside a lot of money, or else it’s not worth doing.” The opposite is true: starting small helps you build habits, reduce psychological resistance, and gain momentum.

1. Commit to “micro-saving” (small weekly or fortnightly amounts)

  • Pick an amount you can afford without strain—say $5, $10 or $20 per week—and commit to transferring that into a separate savings account.

  • Because the amount is small, it won’t feel painful, but over 52 weeks, even $10/week is $520; $20/week is $1,040.

  • Once you’re comfortable, gradually increase (e.g. double it, or add $5 more).

This approach is supported by behavioural science: by lowering the “activation energy” (i.e. the psychological cost of setting aside money), you’re more likely to stick with it.

2. Automate your savings

  • Set up an automatic, recurring transfer from your main (transaction) account to a designated “savings” or “rainy day” account—ideally timed just after you receive your income (salary, etc.).

  • With automation, your future self doesn’t need to make a decision. Over time, you’ll treat the transfer as a “fixed cost”—just like your rent or utilities.

  • Many behavioural finance articles emphasise that systems (not willpower) drive long-term results. (spaceship.com.au)

3. Use “Save More Tomorrow” or “future self” pledges

  • The Save More Tomorrow concept (coined by behavioural economist Richard Thaler) works like this: commit now to increase your savings rate in the future (for example, when you next get a pay rise).

  • This takes advantage of inertia and helps you gradually ratchet up your saving without feeling deprived.

  • Some financial institutions and tools also let you schedule a gradually increasing saving rate over time. (spaceship.com.au)

4. Use “fresh start” triggers

  • Starting on a temporal landmark—a birthday, the start of a new month, first pay cycle, or even a Monday—boosts adherence (because psychologically people see it as a “new beginning”). (CommBank)

  • Use that as your commitment point: “From this Monday, I will allocate $10 per pay cycle to savings.”

5. Mental accounting & goal buckets

  • Mentally “earmark” small savings for a specific goal (holiday fund, emergency buffer, a gadget, etc.). This helps reduce the urge to dip into it.

  • Some people find having multiple labeled accounts (or sub-accounts) helpful, e.g. “Car maintenance fund,” “Home repairs,” “Holiday.”

  • By giving your savings purpose, you reduce the friction of setting aside money.

Principle #2: Be a Smart, Intentional Buyer

Saving isn’t just about cutting; it’s also about optimising your spending. A large portion of wasted money is due to poor purchasing decisions, impulse buys, or neglecting to shop around.

1. Become a bargain hunter (the “deal detective” mindset)

  • Before making a purchase, always ask: “Can I find this cheaper elsewhere?”

  • Use comparison websites (e.g. for insurance, electricity, internet, travel) to check alternatives.

  • Subscribe to newsletters or alerts from deals/discount sites (just be careful not to be tempted into unnecessary buys).

In Australia, many households save money by switching utilities, insurances, or telecommunications providers. Financial service sites often highlight how much you could save by switching. This is a low-hanging fruit.

  • Also, Australians are increasingly buying items marked down (close to expiry date, clearance, bulk discounts). Reporting suggests Australians are saving collectively $5.3 billion by purchasing sale or marked-down grocery items and switching to generic brands. (News.com.au)

  • Avoid last-minute grocery “top-ups” (i.e. midweek impromptu shopping) — these tend to cost you extra as you make impulse buys. The ING/Compare the Market research estimates such shopping can cost an average extra $97/month. (News.com.au)

2. Use the internet wisely to dig deals

  • Use price-comparison tools, browser extensions, cashback / reward programs (if they genuinely save you money, not encourage more spending)

  • Sign up for “deal alert” or “price drop” trackers for items you want

  • Wait for sales events (e.g. end-of-season, Black Friday, Boxing Day) for planned purchases

  • Use online marketplaces and peer-to-peer platforms for secondhand goods (for non-essentials) — but only if quality is acceptable

  • Take advantage of loyalty programs or coupons—but don’t let them push you to buy things you don’t need

3. Evaluate “total cost” not just sticker price

  • When comparing deals, consider shipping, fees, warranty, maintenance (especially for appliances, electronics)

  • Buy items that last: spending a little more upfront on quality (durable, energy efficient) may pay off over time

  • Use cost-per-use thinking: e.g. a $100 item used 100 times is effectively $1/use, while a $20 item used twice is $10/use

4. Delay non-urgent purchases (30-day rule)

  • For discretionary items (gadgets, clothes, extras), impose a waiting period (e.g. 30 days). If after that wait you still want it, revisit.

  • Many behavioural guides recommend this to reduce impulse buying. (spaceship.com.au)

5. Bulk buy or group buy when it makes sense (and share with trusted people)

  • Items with long shelf life (toilet paper, cleaning products, non-perishables) can often be cheaper in bulk

  • Team up with family or friends to split bulk purchases

  • Just be careful not to overbuy (waste is still loss)

Principle #3: Identify and Curb Recurring Discretionary Expenses

Recurring small “luxuries” can quietly erode your budget. The trick is not necessarily to eliminate all pleasure, but to be intentional and cut the “low-value repeat spends.”

Here are common recurring discretionary costs and strategies to manage them:

1. Eating out, takeaway, coffee runs, lunches

  • Pack lunches instead of buying daily

  • Brew your own coffee or tea rather than buying cafe coffees multiple times a week

  • Limit dine-outs to “treat days” (e.g. once per week or fortnight)

  • When eating out, pre-decide your budget or choose lunch specials rather than full dinner menus

  • Use cooking-at-home “theme nights” to make things fun (e.g. taco night, stir-fry night)

These small everyday expenses, repeated, can add up big over a month or a year.

2. Subscriptions, streaming, digital services

  • Audit all your subscriptions (streaming, apps, software, memberships). Cancel ones you don’t use enough.

  • Switch to cheaper tiers or share plans with family (if allowed)

  • Set a “subscription freeze”: e.g. re-evaluate each quarter which ones you still need

3. Impulse “convenience” purchases

  • Buying bottled water, packaged snacks, convenience foods

  • Extra services you rarely need: premium features, delivery fees, “upgrades”

  • Assess whether each convenience cost is worth the benefit

4. Recurring entertainment & social spending

  • Socialising doesn’t have to cost — consider more free or low-cost activities (walking, picnics, communal cooking)

  • Limit expensive nights out; set a monthly “fun budget”

  • Be intentional about gifts, events, celebrations — plan ahead with a budget

5. “Lifestyle creep” and buy-now-pay-later (BNPL) traps

  • As your income increases, there’s a temptation to increase spending. That “upgrade” mindset erodes gains.

  • BNPL services (Afterpay, Zip, etc.) are pervasive in Australia. Gen Z, in particular, is under financial stress from BNPL usage. (ASIC)

  • Moreover, recent reporting shows that many Australians are living paycheck-to-paycheck partly due to lifestyle creep and over-reliance on BNPL. (Courier Mail)

  • Use credit responsibly; always pay off BNPL/credit before interest or fees kick in

6. Gambling and risky “fun money”

  • Research in Australia shows gambling is associated with poorer saving behaviour. (SpringerLink)

  • If you gamble, set strict limits or treat it as a pure entertainment expense (budgeted, not open-ended)

Principle #4: Anchor Savings to Purpose & Milestones

People are far more motivated when they have a why. Without purpose, savings often get redirected to other things.

1. Define clear, concrete goals

  • Emergency fund (3–6 months of essential expenses)

  • Major purchases (car, replacement, home renovation)

  • Holiday or travel fund

  • Personal development (course, certification)

  • Retirement or long-term investments

Write your goals down, with timelines and target amounts. Make them specific (“$2,000 in 12 months” rather than “save more”).

2. Break large goals into smaller milestones

  • If your goal is $1,200 in a year, that’s $100/month or ~$25/week

  • Celebrate when you hit increments (e.g. every 25% of the goal)

  • Use visual trackers (charts, jars, apps) so you see progress

3. Use “accountability devices”

  • Tell someone about your goal (friend, partner, mentor) — the social pressure helps

  • Consider joining a savings challenge or group

  • Use commitment devices (lock-in transfers, scheduled increases, automated escalation)

4. Reassess and rebalance periodically

  • Quarterly or semiannual review: Are you still aligned with these goals?

  • If priorities change, explicitly reallocate rather than just drifting

  • Redirect windfalls (bonuses, tax refunds) into your goals instead of treating them as “extra disposable”

Step-By-Step Getting Started (To Turn This Into Action)

Here’s a suggested action roadmap you can follow today or this week:

  1. Set one small savings target
     Choose a modest weekly or fortnightly amount you can commit to saving (e.g. $10/week).

  2. Open a dedicated savings (or high-interest) account
     Keep it separate from everyday spending accounts (to reduce temptation).

  3. Automate the transfer
     Schedule an automatic deposit from your transaction account to your savings account just after you receive income.

  4. List and audit recurring discretionary expenses
     Identify all the small repeat costs (coffee, lunches, subscriptions, streaming) for the last month. Which ones can you reduce or eliminate?

  5. Pick one “switch” or “comparison” to do this week
     For example: compare electricity providers, shop for cheaper insurance, or check mobile plans.

  6. Delay one impulse or non-essential purchase
     Use a 30-day waiting rule; see if you still want it later.

  7. Create or review your goals
     Write down 2–3 financial goals (short to medium term). Break them into milestones and schedule check-ins.

  8. Set a calendar reminder for review
     Every 3 months, revisit your saving rates, spending, and goals.

Once you begin, you’ll gain momentum—and you'll likely feel more confidence and control.

Why This Works: Behavioral Insights & Australian Context

Here’s how behavioural science supports the strategy above, especially in Australia’s current environment.

  • Dependence on systems over willpower
     Because humans are susceptible to short-term impulses, systems (automated transfers, default settings) help you stay on track. (spaceship.com.au)

  • Fresh-start effect
     Temporal landmarks (new week, month, birthday) signal it’s “time” to start, increasing motivation. (ANZ)

  • Social proof, accountability, habit stacking
     Talking about your goals, linking a new habit to an existing one, and nudging yourself with peer pressure all help cement the behavior. (CommBank)

  • Loss aversion and commitment devices
     People dislike loss more than they like gain. By externally “committing” (automated transfers, telling others), you create psychological cost for failing.

  • Addressing “present bias”
     The tendency to prefer immediate rewards causes overspending. By automating and delaying, you reduce that bias.

In Australia, the cost-of-living squeeze and inflation make discipline more important. Smart switching, bargain-hunting, and reducing small repeated costs (coffee, takeaways, subscriptions) are especially effective under tight margins. The ING/Compare the Market research shows the cumulative gains from smart shopping are substantial. (News.com.au)

Australian households may also benefit from frequent review of utility, insurance, and telecommunications contracts. Because these services often have annual renewals, the moment of renewal is a natural trigger to shop around.

Furthermore, Australians’ use of BNPL is high, and regulatory changes are increasing scrutiny of how these affect credit scores. (Courier Mail) Awareness of how buy-now-pay-later (or smartphone “buy now” ease) can undo disciplined saving is crucial.

Finally, the link between positive financial behavior and mental health is especially meaningful—saving, reducing debt, and establishing regular habits tend to lead to reduced stress and greater overall well-being. (Home)

Realistic Mindset: Patience, Not Perfection

  • Don’t beat yourself up for setbacks. The goal is progress, not perfection.

  • Some weeks may be tougher than others. Adjust your saving amount if needed, but don’t quit entirely.

  • Over time, even small amounts aggregate.

  • Let your savings grow invisibly—treat them as a line item just like rent or an insurance premium.

  • Occasionally treat yourself (within reason) so you don’t feel permanently deprived—balance is sustainable.

Common Objections & Ways to Overcome Them

Objection Response / Strategy
“I don’t have enough spare money.” Start with very small amounts. Even $5 or $10 per week is better than nothing. As habits solidify, increase gradually.
“I’ll forget or skip the transfer.” Automate it. If automated, your future self won’t need to decide.
“I hate giving up coffee/going out.” Don’t eliminate all pleasure. Instead, allocate a modest “fun budget” and be intentional about when you indulge.
“I’ll just use savings if something comes up.” Keep a buffer (emergency fund) separate. Make that a non-touch category unless truly essential.
“Deals and comparison take too much effort.” Do one comparison per week; set a time limit. Over time you build the skill.
“I’ll start next month / on pay rise.” Use a fresh start date (e.g. next Monday) and commit now—momentum often beats delay.

Summary & Final Call to Action

Saving money is not a destination—it’s a discipline, a mindset, and a set of habits you build over time. Here’s what to take away:

  • You don’t need to begin with huge amounts. Small, consistent saving is powerful.

  • Automation and behavioural “nudges” (fresh starts, commitment devices, mental accounting) will carry you further than willpower alone.

  • Smart shopping, deal tracking, and avoiding recurring discretionary expenses unleash “hidden savings.”

  • Anchoring your savings to meaningful goals gives you purpose and focus.

  • Review, adapt, and stay patient. Even when progress feels slow, consistency compounds.

References

Category: News