Ten ways to wipe debt, save money and make more cash

As the financial pressure on Aussie households grows, financial planner Adele Martin shares easy ways to make money.

Soaring interest rates and a historic rise in inflation combined with rising grocery prices are hitting the hip pockets of stressed Australians more than ever.

When it comes to reducing spending, leading financial planner Adele Martin has identified key strategies to help Aussies stay afloat amid the biggest financial crisis in years.

Ms Martin, who recently helped one client wipe out $50,000 of credit card debt, likens the word ‘budget’ to a restrictive diet and prefers to call it a “spending plan”.

Setting one up – she recommends using the moneysmart.gov.au app – is an essential first step for those who want to cut costs.

Adele Martin helped one client wipe a $50,000 credit card debt. Pictures Supplied

“This will help you feel more in control as you will know if you have a deficit how big it is and then you can start making a plan,” she said.

Creating a spending plan- by looking at your income, fixed expenses and discretionary expense – will also help people feel less overwhelmed and anxious about their finances, the NSW-based financial planner said.

With interest rates rising to record levels, for many of us our mortgages and the threat of soaring repayments are the biggest concern.

Ms Martin urges consumers to be wary of paying a “loyalty tax” to their bank and says picking up the phone and making a 15-minute call to your lender could save you thousands per year in repayments.

She recently helped a client save $7000 just by asking their bank for a reduced interest rate on their mortgage.

“Sometimes we don’t even have to leave our current provider, we just have to ask them because they don’t want to lose you,” she said.

“Just by asking, that can be a way to put thousands of dollars in our pocket and it could only take 15 minutes.”

Budgets are out - and “spending plans” are in.

In terms of household costs, meal planning and online supermarket shopping – to avoid impulse buys – will also save serious cash.

Ms Martin also warned of the need to regularly review your spending habits and put a pause on emotional buys.

“Make sure you aren’t falling into the habit of emotional spending – buying something to get that dopamine hit and make you feel good.

“This sort of happiness is short lived and can be costing you thousands.

“A good way to ensure you aren’t emotionally spending is to have a 48-hour rule – if you want to buy something you haven’t planned for it wait 48 hours before buying it to make sure you really want it.”

Aside from tackling spending, she said, it is important to look at ways you can boost your income either through a side hustle or by negotiating a pay rise.

“Places like Airtasker, Air Volte, Pawshake, Camlify can put thousands of dollars in your pocket a year,” she said.

When it comes to the often awkward topic of asking for a pay rise, the financial planner has resources available in her Saving Squad Facebook group.

“We run heaps of free things in there, we’ve got a five day challenge that we do, helping people save money. We’ve got templates and the scripts to negotiate a pay rise and bills.”

Adele Martin’s Top 10 Tips to tackle the soaring cost of living

1. Do a Budget

To create a spending plan list your income then deduct your fixed expenses (these are the expenses you have no control over and change very little eg mortgage, rent, electricity) and then deduct your more discretionary expenses (eg food, presents etc).

This will help you feel more in control as you will know if you have a deficit how big it is and then you can start making a plan.

2. Pay Bills Weekly

If money is tight it can be easier to pay your bills weekly or fortnightly rather then get a big bill at the end of quarter.

3. Review your Habits

Review the things you do on autopilot without thinking about. Example: buying coffee every day, buying lunch, shopping on a Saturday. Do a check in to see if these things bring you joy or are you just doing out of habit.

4. Meal Planning

Meal planning doesn’t have to be you giving up your Sunday to cook in bulk. It’s just planning in advance so you don’t have to go to expensive takeaway at the last minute.

5. Negotiate a Bill

At least once a year you want to ring up to make sure you are getting the best deal on your bills.

6. Emotional Spending

Just make sure you aren’t falling into the habit of emotional spending – buying something to get that dopamine hit and make you feel good.

7. Buy Second Hand

If you do need to buy something check places like Buy Sell Swap Facebook groups or Gumtree. This could not only save you money but also be better for the environment as well.

8. Second Income

While looking at your expenses is important it’s also a good idea to look at the income side of your household budget as well. Is there a way you can start a side business or secondary income?

9. Negotiate a Pay Rise

The biggest mistake people make when asking for a pay rise is not asking …. people generally aren’t going to give you more money unless you ask.

It’s a good idea to do your research first – talk to recruiters, look at Seek etc to see what someone with your skill set is being paid and if it’s under then schedule a time to talk to your boss or manager.

10 Allow for Fun

Make sure your budget allows for a little fun. Otherwise it’s a bit like being on a 1200 calorie diet – its OK for a little while but long term it will make you miserable and you will eventually have a blowout.