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Date Published : Thursday, July 17, 2008
According to news reports, many Australians' household budgets are being squeezed by rising fuel, food and energy prices and personal debt.
And, as Desiree Fraser of Count Wealth Accountants told news.com.au, in this situation there are usually only two options - earn more or spend less.
With pay rises harder to come by, putting the brakes on outgoings is normally the best option for getting personal finances back on track, she added.
However, many Australians see reducing their spending as a step down in their quality of life. Ms Fraser argues this is a misconception, because better budgeting means money goes further, which can actually improve a person's lifestyle.
Amanda Reed of advice service the Australian Financial Counselling and Credit Reform Association told the site that the first step for consumers looking to cut their spending is to pinpoint where their money is going.
Jotting down outgoings in a notepad for couple of weeks usually gives a good overall picture of outgoings - and many people find little things, such as takeout coffees or store bought lunches, that are making big dents in their bank accounts.
There are a number of other areas where consumers can make savings, she adds. Around the home, turning off appliances at the wall instead of leaving them on stand-by can significantly cut energy bills, as can turning down the thermostat.
Individuals may also be able to save on bank fees and earn higher interest by combining their transaction account with a high-rate savings account, Ms Reed said.
Furthermore, they can use "wealth packages" that link their mortgage to a credit card and transaction account. These deals replace transaction and annual credit card fees with a single annual charge for the whole package, the site says.
Consumers could also make savings by reviewing their health, car and home insurance they are getting value for money on their cover.
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