Money

5 ways to stop leaking money (and a downloadable tracker to help you)

It’s rare to find anyone with a watertight budget, but if your day-to-day spending is leaking like a faulty tap it’s time for a wrench.

By Bron Maxabella

Is the drip, drip, drip of a budget leak keeping you up at night?

Where does all the money go?

You diligently set a budget and you reckon you’re pretty reasonable about sticking to it. You’ve got enough coming in and you’re careful about where you spend it.

In fact, there should be more than enough money in your account, yet month after month you find yourself scrambling to make ends meet. What’s going on?

“To many people, the concept of a ‘budget’ means to limit or restrict spending,” says Darren Johns, founder and financial adviser at Align Financial.

“If we rename the exercise to be a 'spending plan', I have found that people are more likely to keep within their predetermined spending limits as it is something they planned for in advance.”

The best ‘spending plan’ is one that is tracked and measured. Use our free spreadsheet to set your goals, track your expenses and reflect on how you’re going:

Make a copy of CITRO Expenses budget worksheet.

However, even the best ‘spending plan’ won’t get you where you want to be if too many insidious and unnecessary expenses see your hard-earned money simply drift away.

Here are 5 of the key reasons your budget is dripping and what you can do to plug that hole.

1. Don’t be lazy

Sorry to offend, but if you’re not doing an annual comparison between what you’re currently paying and what’s on offer elsewhere, you’ve got a budget leak.

That’s because there’s no such thing as rewarding loyalty anymore. In fact, the opposite is true.

Most long-term customers pay a ‘loyalty tax’ because companies (including banks, energy providers, insurers… everyone) offer their best deals to attract new business.

But guess what? If you shop around, you can be that new customer every single year.

The easiest way to compare what’s in the market is by using a comparison website like:

Keep in mind that these sites can be biased due to paid sponsorships and commissions, so it’s good practice to run your numbers through a few of them each time.

It’s worth doing. A quick comparison of electricity prices on one of the sites above ranged from $761 per quarter to $940 per quarter. That’s a $716 saving per year and it took less than five minutes to run the numbers.

In the first instance, take the lower number to your existing provider and see if they can match it. If they can’t, switch your business and save your money.

Find out how to save on your mobile phone costs as well as check out these 9 hacks to reduce the cost of your phone. Citro’s partner Tangerine has also explained how to save your mobile data.

Read more on how to negotiate with internet providers in 8 ways to reduce your internet costs.

2. Drive carefully

According to the latest Australian Automobile Association’s Transport Affordability Index, Australians spend an average of $24,262 a year on transport, or a whopping 16.9% of their budget.

That’s a huge bill and it’s mostly driven by your car: loans, fuel, insurance, servicing, rego and roadside assist all add up to a massive budget leak.

The first step to fixing it is to compare your running costs, especially insurance.

Next, make sure you use fuel wisely – it’s the second biggest cost. Read more on 5 savvy ways to save on car costs.

To use less fuel altogether, consider swapping your current car for a smaller model, preferably an electric one. If that’s not feasible, at least keep your tyres pumped to the correct pressure (check them at least once a month). You’ll use less fuel that way.

3. Eat like a winner

While it’s convenient to hit one of the big two supermarkets to do a single weekly shop, you’re paying for the privilege.

For a start, each of the supermarkets has different weekly specials, so you’d be wise to check who has what and shop accordingly. No surprise, there’s an app for that:

Trolley Saver – compares what’s on your grocery list across Coles, Woolworths and Aldi
Half Price – lists everything that’s 50 per cent off at Coles and Woolies.
Grocery Getter – tells you how much you’ll save at the major supermarkets based on your shopping list.

If you’ve got access to an Aldi supermarket, just shop there. Consumer advocacy website CHOICE has consistently found it to be significantly cheaper than either Woolworths or Coles.

Don’t forget the smaller retailers, either. A Guardian Australia survey found that it’s actually cheaper to buy your fruit and veg at independent grocers.

You can also think about growing your own - it’s enjoyable and can save you in the long run. Discover how to grow your own nutritious microgreens or grow your own vegetables or herbs.

If you’d rather eat out than grocery shop, you can still save.

Restaurants often have deals on a Monday or Tuesday when less people tend to eat out. Check what’s on offer on your Citro Card by heading to your ‘offers’ tab.

Many also have special offers earlier in the evening to entice punters to eat when they first open for dinner.

4. Harness your power

Energy costs are sky-high so taking steps to reduce consumption will help fix your budget. Read 16 easy ways to do that on Citro.

After that, do all the small things that add up to big savings.

If you can afford the upfront costs, going solar could save you stacks in the long run. Be sure to ask around for a reputable supplier and get those quotes happening to find the cheapest installer.

5. Shop carefully

While all of the above is excellent, impulse shopping can frequently bring even the most careful budgeter undone. It can be so hard to resist shiny new things.

“[Have] an upper limit on your immediate purchases,” advises Johns. “Let’s say you set yourself an impulse limit of $500. Anything below that you have a green light to buy on sight; anything above that you have to step away from the screen or store or whatever for at least 60 minutes (24 hours is even better) before you make the purchase.”

This makes your shopping more intentional, giving you the time and space to decide if your purchase really aligns with your goals. “[It] also allows you to have a moment imagining a future without that expense,” says Johns.

You can also try:

· Use cash only – freezing your credit cards (literally) and only using cash should slow you down and wipe out online shopping completely.

· Plan all purchases in advance – each month write down a ‘shopping list’ for all purchases then make it a rule that you only buy something that’s on your list.

· Stay at home – if you’re prone to ‘browsing’, you’re prone to ‘buying’, so keep away from the stores altogether.

· Blocking repeat offenders – of course, these days it’s just as easy to shop from home, so be intentional about the sites you visit. Unsubscribe from shopping newsletters, remove saved credit card information so it’s harder to make a purchase and use an app like LeechBlock or BlockSite to avoid the most tempting brands altogether.

· Make a wish list – if you can’t resist visiting, try adding potential purchases to a ‘wish list’, rather than the shopping cart. Then apply Johns’ 24-hour wait time before committing to buy. Chances are you won’t even give the item another thought, let alone revisit the site to make your purchase.

How to use the downloadable spending tracker

If you're familiar with using spreadsheets, you'll find our downloadable tracker is easy to use. Simply follow the prompts to make your own copy and save it to your Google account.

The instructions are on the front page of the tracker, so follow them.

If spreadsheets and tracking your spending with a budget are new to you, you might want to start with a more manual process to get a clear view of where your money is going day to day and month-by-month. There are also spending tracking apps you can use - just search the Google Play or App Store to find a free one you enjoy using.

Don't worry about changing your spending habits straight away - tracking is the best way to start recording everything day by day and month by month. Tracking makes it easy to see where your money is going.

You often find that, just by being more aware of your spending, you can start to spend less.

^{Advice given in this article is general in nature and does not take into account your personal circumstances. It is not intended to influence readers' decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.}

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