How to save money - 70 tips start saving money through frugal living

Digital Editor · 21 December 2020
Are you looking to sure up your finances in 2021? Here are 70 frugal living ideas that could help your dollar go further.

The frugal living movement may gain even more devotees in 2021, with expectations it could be a year for sticking to the basics after the COVID-19 pandemic prompted many to find ways to make their hard-earned dollars stretch even further.

Canstar’s latest Consumer Pulse Report found 73% of Australians surveyed feel they are living within their means financially, meaning they are spending less than they earn, saving regularly and limiting their debts. While this is encouraging, they still have big financial concerns heading into 2021 – the main ones being the cost of groceries and the fear of job security.

With that in mind, we’ve put together a list of 70 ideas designed to help kickstart the journey towards a more thrifty life and #savemoney.

1. Start smart

A good place to start if you want to save money and live more frugally is to work out where you are spending it. Keep a spending diary for a couple of weeks – or go through your bank statements – to build up a picture of your habits when it comes to your finances. Then, write a budget. (Canstar has a handy budgeting app that makes it easy to keep track of all your accounts in one place.) That way, you will be able to work out how much you can comfortably save while still covering those essential expenses.

2. Write down your goal

Psychologists say that when you write down your goals, you are more likely to achieve them. One study found that those who did were 42% more successful than those who did not. “Goal setting in psychology is an essential tool for self-motivation and self-drivenness,” writes Indian counsellor Madhuleena Roy Chowdhury in Positive Psychology.

One widely-used rule of thumb for ensuring your goals are effective is to ensure they’re ‘SMART’ – Specific, Measurable, Achievable, Relevant and Time-based. For example: “I want to save for a trip to Noosa, which will cost $2,000, so I need to save $45 a week for the next 45 weeks.” Write it down and then put it up somewhere you can regularly see it – perhaps on the fridge, or on the back of your front door, or in your wallet.

3. Make saving fun

‘Saving’ does not have to mean ‘chore’. There are plenty of ways that you could turn cutting expenses and saving money into something enjoyable. You could ‘gamify’ your savings habit (try typing “savings games” into Pinterest, for example), such as savings bingo, or try a savings ‘challenge’. Popular examples are the 52-week savings challenge, where you put away $1 in the first week, $2 in the second and so on until you are saving $52 (for a grand total of $1,378 plus interest in a year); the 52-week dice challenge (where you save whatever amount comes up on the dice each week); or the weather-saving challenge, where you take the highest temperature on a certain day of the week and save a corresponding amount. There are also several apps that can help.

4. Recognise ’emotional spending’ and try to avoid it

The frugal living movement is all about conscious consumption. Emotional spending, also known as retail therapy or impulse buying, is when someone spends money as a way to change their mood. If it’s just a simple purchase which doesn’t impact your financial wellbeing, some studies have shown that this might not be so bad in moderation. But if you are trying to save, it could pose a problem. Even a relatively small amount can add up – a $10 impulse buy three times a week would add up to $1,560 a year, for example. And prolonged retail therapy could have a negative impact in the long term, not only on your finances but also on your mental health, a number of studies have found. One way to combat the urge to shop is to recognise when you are in an ‘impulse buying’ mood, and engage in positive mood-enhancing activities instead, such as exercising or spending time outdoors – doing something that you enjoy.

5. Join a ‘savings movement’

If you need the motivation of a group to help keep you on track, there are a plethora of savings groups to join on social media. For example, there’s a ‘Buy Nothing‘ movement, where members give away items to other members who need them; myriad ‘savings hacks’ communities, which share everything from meal-planning ideas to which stores are having sales; and co-op groups where people buy food or other items in bulk and share the cost. (However, it pays to do your research before jumping into one of these groups to ensure that they are legitimate, and to also be careful giving out any personal or financial information.) Some movements to investigate could include website communities such as She’s On The Money, Facebook private groups  such as “Frugal Families – Living Well on a Budget” and “Frugal Homemaking and Living”, and Reddit, which also has a plethora of information shared by users, such as on the Australian Specific Frugal Tips subReddit. Pinterest, too, has many “Pinfluencers” (Pintrest influencers) that pin tips, such as Yaz – The Wallet Moth, and Emma, while Instagram has the ever-popular hashtags #frugalliving, #savingmoney and #frugallife. (It’s good to keep in mind that sometimes social media influencers can receive payment for their posts.)

6. Start a coin jar

Throwing your silver and gold coins into a (non-opening) coin jar or tin each day can help build up a savings stash, and lighten your pocket at the same time. One Brisbane man who threw his spare change into a bucket and cashed it in seven years later had accumulated a whopping $888.05. However, before taking large amounts of change into a bank, make sure there are no fees attached to exchanging them for notes or for it to be electronically deposited into your account. And don’t forget that you could be earning interest on your coins if you put them in a savings account.

A receipt for a coin deposit to a bank.
A receipt, showing the amount of coins one person cashed in at a bank. Source: Canstar

7. Shop at a physical grocery store (but remember to remain socially distanced)

A surprising finding by Roy Morgan research in 2019 found Aussie shoppers who bought their groceries online tended to spend more than those who visited ‘bricks and mortar’ stores. The study found that for Woolworths customers, those who shopped online spent an average of $186 a week compared to those who shopped in a physical shop, at $103. For Coles shoppers, it was $158 versus $97 a week. If you do prefer to shop online – or have to because of social isolation requirements – it could be a good idea to make a list and stick to it, no matter how good the ‘online only’ specials seem to be. You could also consider checking out Canstar Blue’s latest customer satisfaction ratings for online grocery shopping.

8. One shop, once a week: Fight back against temptation tactics

Doing one large grocery shop per week, rather than several small ones, could help to cut down on impulse buys, takeaway and wastage. To do that, though, it could mean you have to plan ahead, such as by writing a weekly meal menu so you can get everything you need in one shopping trip. And if you have all the ingredients at your fingertips, it’s easier to resist the temptation to order delivery or takeaway – it can be quicker to cook a simple meal at home than it is to order via an app and wait for it to arrive. This could also be a social isolation-friendly behaviour – limiting your trips outside your bubble if you prefer to shop in a physical store.

9. Use a shopping list app

How many times have you gone to the shops and bought that extra bottle of tomato sauce only to return home and find three more in the cupboard? Shopping without a list can mean unnecessary purchases, which means less in your savings account. And you could make it even easier to keep track of your shopping lists by storing them on a smartphone app.

10. Meal prep like a pro

‘Meal prepping’ – or preparing many meals at once and storing them for later consumption – could help you ward off impulse take-away food purchases and allow you to cash in on bulk-buy benefits. There is a large and enthusiastic community of meal prepper bloggers and enthusiasts, who swap recipes and ideas to help people prepare a week – and sometimes longer – of meals. You might also consider comparing healthy meal delivery services for a minimum effort option.

11. Make use of leftovers

Australians throw away up to 20% of the food they buy, according to the Do Something! Foodwise campaign commissioned by the NSW Government. While the environmental cost of this waste is high, it also means 20% of the money the nation spends on groceries ends up in the bin. Plan how you might use excess food and you could cut down on wastage, and therefore the amount of food you have to buy in the first place. Cook larger portions of your meals and freeze them to use as leftovers. Pizzas, bolognese sauce, curries, lasagne and soup all freeze well and can also be handy lunch options. You could also try these BBQ recipes or these microwave recipes to get you started.

12. Use your own coffee machine

With a flat white costing Australians an average of $4, according to Statista, it could pay to look at changing your morning ritual if it involves buying a takeaway coffee. Shouting yourself a coffee each day for a year could cost more than $900 – multiply that by the number of hits you need a day and it could add up to thousands of dollars a year. It could be more economical to buy a coffee machine. If you choose a coffee pod machine, you could economise further by switching to reusable pods, which supplier Crema Joe said could save “an average household [more than] $400 a year”. (The company has a capsule cost calculator).

13. Swap meat for veg, even occasionally

When it comes to meat versus veggies, the latter is usually cheaper. For example, swapping the 500g pack of beef mince – about $8 from major supermarket chains – in your tacos with a couple of tins of beans – about $1 each – could save you $6 on one meal. That’s $312 a year, for an example where a fairly inexpensive meat is exchanged with an even cheaper non-meat alternative. We’re not saying you should necessarily go vegetarian, but eating less meat and more vegetables could help you stick to your weekly budget.

14. Buy frozen veggies

And while on the subject of vegetables, the frozen variety can often be cheaper than their fresh counterparts and, if stored correctly, can have a long shelf life. Contrary to popular belief, they can also be just as nutritious as fresh vegetables which have been transported, according to some studies.

15. Go grocery shopping on a full stomach

Some studies show that hunger may cause you to buy extra or unnecessary items while doing your weekly grocery shop, and that the food you’re likely to buy when hungry-shopping, could very well be high in calories, too. You may be able to avoid being caught out this way by eating beforehand.

16. Swap brands and look down for savings

Next time you go to the supermarket, consider buying the cheaper generic-brand versions of some of the things on your list. Depending on the items, there could be little to no difference in quality, but the price saving could add up over time. You might have to tilt your head up or bend down to find the cheaper products, though, as there are reports that some supermarkets put their cheaper items on the top or bottom shelves, reserving eye-level space for the more profitable items.

17. Pay your bills on time to avoid late fees and maybe even grab a discount

Paying your bills on time is a great way to help keep your credit record cleaner, as well as avoiding having to pay interest or annoying – and often expensive – late fees. These late fees can really add up, especially if you use some buy now, pay later services, which might not charge interest but can slug you if you are late in paying.  If you struggle with your bills, consider setting up a regular repayment amount to even out your cash flow. Some energy providers will also offer a discount to customers who pay on time. You might also be able to save by paying in advance, or by direct debit.

18. Monitor your bank balance

It is a good idea to regularly check your account to make sure you have not been charged for any purchases you didn’t make. If you suspect this, contact your bank, card issuer or other financial institution immediately, and report it.

19. Audit your bank accounts to see if you are paying fees

To avoid paying fees for being overdrawn on your transaction account, check your bank balance regularly. Some banks have apps that keep tabs on your spending and can send you alerts when you are getting close to overdrawing your account. It could also be a good idea to go back through past statements and add up any account-keeping fees you’ve been charged. You could ring your bank to ask for a better deal when it comes to these types of charges. Or you could swap to a different transaction account that is fee-free. It’s a good idea to keep in mind that the interest paid on fee-free accounts could be different to those paid on accounts that charge fees – check with your bank.

20. Check how much interest you are paying on your credit card

If you have a credit card, check what purchase rate is being applied to your transactions. Credit card purchase rates can vary up to above 20%, based on products in Canstar’s database at the time of writing, so it might be worthwhile to compare yours to its competitors. As a general rule, the most cost-effective way to use credit cards is to pay them off in full each month to avoid racking up excessive interest charges. There is a range of relatively low-interest and low fee cards that are available, as well as cards that might have more fees and charges but offer perks such as reward points that may suit some consumers.

21. Phone your bank and ask for a discount on your home loan interest rate

The official cash rate – which most banks use when considering what interest rates to charge on home loans – is at its lowest point to date, 0.10%. Australia has never before seen a home loan market with such low rates on offer – Canstar’s database of more than 4,000 loans offered by more than 100 lenders lists the lowest ‘headline’ rate as 1.77% (1.83% comparison rate) as of 21 December 2020, while the highest rate is more than 7.6%.

22. Shop around for your car insurance

The cost of a comprehensive insurance policy can vary significantly, based on an analysis of policies in Canstar’s database. Some insurers offered discounts during the time of coronavirus, because people may not have been using their cars as often as they normally would. It could also be possible to save on insurance by going for a cheaper provider. Just be sure to check the relevant Product Disclosure Statement and consider contacting the insurer you’re considering, to make sure the new policy provides the level of cover that you need. You can check out Canstar’s most recent car insurance Star Ratings and compare policies on Canstar s database.

23. Review your health insurance

Have you reviewed your health insurance cover lately? It might be possible to reduce premiums by dropping unnecessary cover (such as pregnancy if you are not planning on having any children in the next year, for example), by adjusting your excess (providing you consider yourself to be in a position to cover the extra payment upon hospital admission) or by swapping funds (although waiting times will apply for some medical services).

If you’re comparing health insurance policies, the table below displays some of the hospital and extras policies currently available on Canstar’s database for a 30-year-old single female seeking cover in NSW without pregnancy cover. Please note the table is sorted by Star Rating (highest to lowest), followed by provider name (alphabetical). Use Canstar’s health insurance comparison selector to view a wide range of policies.

24. Review your personal insurance

Another step could be to review your personal insurance, including your life, total and permanent disability, trauma and income protection insurance. Some of this insurance can be taken out via your superannuation fund, so consider whether you may have a double-up between standalone insurance and cover via your super. Is your current level of cover right for your needs?

25. Review your superannuation fund

Do you know how much your superannuation fund is charging you in fees, or what its returns have been over the last few years? A small difference in fees and/or performance could make a big difference over time to your retirement nest egg. It could be worth investigating how the performance of your super fund compares to the national average or other funds, although bear in mind that past performance is not a reliable indicator of future performance. The economic fallout from coronavirus has also affected the recent performance of most funds. Changing your super to one that charges lower fees or offers higher performance may not help out with savings that you can access right now, but it could potentially be a boon further down the track.

If you’re comparing Superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.

Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group specified above.

26. Track down lost money in bank accounts

It could be possible to find money you didn’t even know you had (or had forgotten about). The Australian Government has a website where you can search for ‘lost money’ sitting in bank accounts, company shares or life insurance policies. Meanwhile, the Australian Taxation Office (ATO) offers some tips on tracking down any ‘lost’ super you may have in old accounts.

27. Update your telecommunications contracts

There are hundreds of different phone plans available in Australia. It might be a good idea to review yours periodically, to ensure that it’s cost-effective and suits your needs overall.

28. Seek cheaper ways to connect internationally

Instead of paying a hefty phone bill for those overseas calls, you could consider using an app on your phone or desktop computer while connected to WiFi. This could provide a cheaper alternative than a traditional style of phone call. There are many apps on the market to choose from, with some providing texting and call options including video functionality – although it’s a good idea to monitor your data usage closely while using these applications. And be sure that you are not using your mobile data plan, which can be more expensive if you go over your monthly cap. For example, the popular FaceTime app uses 30MB of mobile data for 10 minutes on a video call, according to Canstar Blue.

29. Avoid streaming on your phone using mobile data

In a similar vein, streaming music or video from your preferred mobile device can eat into your data allowance and potentially cost a lot in download costs (depending on your plan). Some providers may offer an automatic data ‘top-up’ for a fee, once a user goes over their plan limit, which could be an unexpected expense. Consider downloading your favourite tracks, podcast, audio books or any other files to your phone while connected to WiFi. During this time of coronavirus, it could be a good idea to take a look at your phone’s data plan, too, to see if your use has changed if you are working from home and using WiFi more, for example.

30. Review your electricity and gas use

Cut bills by acting energy-wise in the home, which could mean swapping hot water washes for cold, changing light bulbs to more energy-efficient ones, turning off appliances which use a lot of standby power when you aren’t using them, and buying energy-efficient appliances.  Also, it could pay dividends to compare your energy or gas plan against what’s on offer on the market, to help ensure it’s competitive.

31. Pay yourself (your savings account) first

An age-old savings tip from many experts, this idea involves setting up an automatic transfer of money from your pay to a savings account, right after you are paid. This way, you can make it easier for yourself to prioritise savings over discretionary spending. However, it’s also important to make sure that you can cover your bills, so make the amount the appropriate size for your budget.

32. Use ’rounding up’ programs

There are a number of apps that ’round up’ the price of your purchases to the nearest dollar, putting the difference into a savings account or micro-investment scheme. While most charge a regular fee for use, these small amounts deposited regularly can really add up over time. It’s wise to check the terms and conditions of individual apps, however, to ensure that you are using the application that is right for your circumstances.

A screenshot from Facebook of a person's Raiz balance
A screenshot of a micro-investing app balance. Source: Facebook/Canstar (user permission granted)

33. Get your bills online

Some institutions, such as certain electricity retailers, internet suppliers and banks, charge fees for paper statements. This means that if you don’t mind going paperless and getting your statements online, you may be able to save a bit of money. Some people may also be eligible for an exemption from fees, so it could be worth checking this with your provider if you prefer to receive paper statements.

34. Get discounts at the bowser

There are a range of fuel discount loyalty programs on offer at various petrol stations across Australia. Currently, most Shell/Coles Express and Caltex (Ampol) Woolworths petrol stations offer 4c off per litre of fuel to customers who spend $30 or more at their supermarkets. Certain car insurance providers may also offer similar benefits. For example, RACQ members can also save on fuel at participating Puma Energy and Pacific Petroleum petrol stations. There are some free fuel saver apps available for your phone which can show you some of the cheaper fuel prices in your area.

35. Get bonus interest on your savings account

Some providers offer additional ‘bonus’ interest on your savings account if you meet certain criteria, such as making a minimum monthly deposit or making no withdrawals. Sometimes the bonus rate expires after an introductory period. Check to see if your institution has a bonus rate, or consider switching to a savings account with a higher interest rate to help you save money faster.

36. Organise your tax receipts

You may want to consider filing your receipts to help you maximise your deductions when it comes time to prepare your tax return. There are many apps available to help you do this, including one from the ATO called myDeductions. If you have any concerns or questions about this process, it could be worth speaking to a professional tax accountant or financial adviser.

37. Check your family is registered for the Medicare Safety Net

If you are eligible, you may want to ensure you and your partner are registered as a family for the Medicare Safety Net, rather than as two individuals. This will lower your Medicare Safety Net threshold, according to the Australian Government’s Services Australia website. If your out-of-pocket expenses for Medicare-claimable services goes over this threshold, Medicare will start refunding your costs at a higher rate, Services Australia adds. For example, Medicare may pay you back up to 80% of your out-of-hospital Medicare-claimable costs, such as when visiting the GP.

38. Keep things in working order

Keeping your appliances and your car in working order can help you save on regular repairs, and will prolong their use. For example, regularly checking your oil can protect your engine from damage and help you get more mileage out of your car, and making sure your tyres are inflated to the correct pressure can help save money on fuel.

39. Fix it yourself

Some items in your home should be fixed by a professional for safety reasons (e.g. complex electrical issues), but some tasks you may be able to do yourself. From sewing buttons back on shirts, to darning socks, to unclogging drains and replacing tap washers, there are plenty of online tutorials and videos you can use to step you through the process. You’ll not only be saving money by not having to pay someone else to fix it, you also may not have