If you've been finding it difficult to keep to your savings target, it might be time for a quick review. 

Generally, you will find that your income is fixed. So to identify surplus savings potential, take a closer look at your expenses, especially in relation to household expenditure. 

Itemise household expenditure

According to the Australian Bureau of Statistics' Household Expenditure Survey 2009-2010 the average Australian household expenditure in 2009-2010 was about $1,236 per week. Taking inflation into account this is approximately $1,429 per week in today's figures.  

Your own circumstances: eg family size, education costs, child care requirements, and transport costs will mean that your weekly spending will likelty differ from the national benchmark.  A useful practice is to break down your own spending into categories. The more detailed you get, the easier it is to see where savings can be made. 

An example is shown in Table 1 below. 

Household expenditure categories (goods and services)Total goods and services expenditure ($)Total goods and services expenditure (%)
Current housing costs (selected dwelling)25818.0
Domestic fuel and power382.6
Food and non-alcoholic beverages23616.5
Alcoholic beverages372.6
Tobacco products151.0
Clothing and footwear513.6
Household furnishings and equipment684.7
Household services and operation785.5
Medical care and health expenses765.3
Personal care281.9
Miscellaneous goods and services1359.4
Table 1: Australian Bureau of Statistics* Household Expenditure Survey, Australia

If you are unsure about how to break down your spending habits, consider tracking individual transactions via your receipts and bank statements over a period of 3 months – this will help you to get a handle on how you spend your money. 

Identify Areas for Savings


Once you have categorised your household expenditure, you now have an insight into where savings can be made. Here are a few areas that may yield results:

  • Needs vs. wants - Understanding the difference between needs and wants is vital to cutting down on household expenditure. We're not saying that you should cut out all "wants", but keep the distinction in mind when making purchases, and ask yourself "do I really need this?"
  • Utility bills - Simple things like, turning off the lights, using a shower timer, hanging washing on a clothesline instead of using the dryer, and unplugging devices/appliances when they're not in use really can help cut down on your energy and water consumption.
  • Reviewing your services - Regular payments for services like utilities, car insurance, home and contents insurance, gym membership, mobile and internet plan, magazines and publications as well as digital streaming (e.g. Netflix).
  • Food waste - According to a recent report, Australians waste over $10 billion worth of food annually, which roughly equates to $1,100 per annum ($21 per week) for each household. Remember that its not just food you're wasting but money too. Buying fresh food in smaller quantities and with a specific purpose in mind can help to reduce food waste. 
  • Implement a money management plan - consider restructuring the way your cash flows by using different bank accounts for savings as opposed to regular spending (current account). Use credit cards only for food, utility bills and education expenses, or eliminate them entirely and replace them with a debit card linked to your current account.
Reducing your impact on the environment also reduces the impact on your wallet. 

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