How to Manage Money & Reduce Cost of Living

17/02/2026

How to Manage Money & Reduce Cost of Living

Learn practical, general strategies to manage your money, reduce everyday expenses, and build stronger financial habits during Australia’s rising cost of living.

How to Manage Money & Reduce Cost of Living

The rising cost of living is making it harder for many Australians to stay on top of their finances. Rent, groceries, utilities and insurance have all increased in recent years, putting pressure on household budgets — even for people with steady incomes.¹

The good news? Improving how you manage money doesn’t have to involve complex spreadsheets or extreme sacrifices. With a few simple habits and practical systems, you can better understand your spending, reduce unnecessary costs, and feel more confident about your finances.

This guide covers:

How to understand your current financial position
Simple ways to manage your money day to day
Practical strategies to reduce the cost of living in Australia
Tools and support to help you stay on track

We’ll also explain how Credit24 may be used responsibly as one possible option when unexpected costs come up.

Apply now

First, Understand Your Financial Position

Before you can manage money effectively, you need a clear picture of where you stand.

Know your numbers

Start with the basics:

Income: salary, casual work, side income, Centrelink payments
Expenses: fixed (rent, utilities) and variable (food, fuel, subscriptions)
Debts: credit cards, personal loans, buy now pay later, car loans
Savings: emergency funds, offset accounts, savings accounts

This step alone often reveals where money is leaking without you realising it. The Australian Government’s MoneySmart tools are a good starting point for reviewing your financial health.²

Calculate your net position

Your net position is:

What you own (assets) – what you owe (liabilities)

It doesn’t need to be perfect — it just needs to be honest. Understanding this can help you set realistic financial goals, rather than relying on guesswork.

Helpful reads:
https://www.credit24.com.au/blog/how-to-do-a-budget
https://www.credit24.com.au/blog/what-is-a-budget
https://www.credit24.com.au/blog/financial-goals

How to Manage Your Money Better

1. Prioritise Debt Repayment

Debt can quietly block progress — especially high-interest debt.

Start by listing all debts, including:

Balance
Interest rate
Minimum repayment

Then choose a strategy:

Avalanche method: pay highest interest first (may reduce total interest over time)
Snowball method: pay smallest balance first (may help build momentum)

If you’re juggling multiple high-interest debts, consolidation may be an option to explore — provided the total cost is lower and repayments are affordable.³

2. Build Financial Resilience

Financial resilience is your buffer against stress. When unexpected bills hit, a financial safety net can reduce the need to rely on credit or miss essential payments.

Emergency fund basics:

Aim for 3–6 months of essential expenses
Start small — even $20–$50 per week adds up
Keep it separate from everyday spending

According to MoneySmart, having emergency savings can reduce reliance on high-cost credit during unexpected events.⁴

A helpful habit:
Automate transfers on payday (“pay yourself first”)
https://www.credit24.com.au/blog/pay-yourself-first

3. Protect Your Financial Future

Money management isn’t just about surviving the next bill — it’s also about planning ahead.

Key areas to review:

Insurance: health, income protection, car, contents
Superannuation: employer contributions, fees, investment options
Government benefits: co-contributions and tax concessions

ASIC notes that reviewing insurance and super regularly can help improve long-term financial outcomes — especially during cost-of-living pressure.⁵

How to Reduce Cost of Living in Australia

Reducing expenses doesn’t mean lowering your quality of life. It often means being intentional with your spending and reviewing areas where costs have increased over time.

Housing Costs

Housing is usually the largest expense.

Practical steps:

Review rent or mortgage rates annually
Compare energy providers
Use energy-saving habits and upgrades

Helpful guides:
https://www.credit24.com.au/blog/how-to-reduce-electricity-bill
https://www.credit24.com.au/blog/how-to-reduce-gas-bill-australia
https://www.credit24.com.au/blog/how-to-save-water-at-home

Government energy comparison tools can help households find cheaper plans without changing usage.⁶

Groceries and Food

Food costs have risen sharply across Australia.⁷

Ways to reduce grocery spending:

Meal planning and shopping lists
Buying home-brand items
Shopping seasonally
Reducing food waste

See:
https://www.credit24.com.au/blog/how-to-save-money-on-groceries
https://www.credit24.com.au/blog/discretionary-spending

Transport Costs

Transport can quietly drain your budget, especially when fuel, insurance, and maintenance costs rise.

Cost-saving options:

Comparing public transport vs car ownership
Fuel-efficient driving habits
Regular car maintenance
Reviewing car insurance annually
Using OSKO for faster payments (where supported) to help avoid late fees and missed due dates

Tips to Reduce Expenses Without Sacrificing Lifestyle

Saving money doesn’t mean cutting joy. Often, it’s about removing spending that doesn’t add value, so you can keep spending on what matters most.

Try this:

Audit subscriptions every 6 months
Negotiate phone, internet and insurance plans
Use cashback and loyalty programs strategically
Choose free or low-cost entertainment

Libraries, community centres and councils often offer free resources — from workshops to streaming access — that may help reduce everyday costs.⁸

Helpful reads:
https://www.credit24.com.au/blog/50-30-20-budget-rule

Digital Tools to Manage Money Better

Technology can make money management simpler and more consistent, especially if you struggle to track spending manually.

Popular Australian tools include:

MoneySmart budget planner – government-backed
Frollo – automatic expense categorisation
WeMoney – credit score tracking
Pocketbook-style apps – spending alerts and insights

ASIC recommends digital budgeting tools as a practical way to improve financial awareness and behaviour.⁹

Getting Professional Help

If money stress feels overwhelming, help is available. Speaking with a professional may help you understand your options and create a realistic plan.

Free support services:

National Debt Helpline: 1800 007 007
Financial Counselling Australia
MoneySmart guidance tools

Financial counsellors can help with:

Negotiating with creditors
Understanding hardship options
Creating realistic repayment plans

These services are confidential and independent.¹⁰

Credit24: Supporting You With Responsible Borrowing

Sometimes, even with good budgeting, life throws curveballs. In some situations, a personal loan may be an option to consider — especially if you have a clear repayment plan and have compared alternatives.

Credit24 personal loans may help when used responsibly:

Loan amounts from $500 up to $10,000
May assist with consolidating high-interest debts
May help cover unexpected expenses
May support short-term cash flow gaps

Why people choose Credit24:

100% online application
Fast approval decisions
Transparent pricing
Flexible repayments aligned with your budget

You can learn more here:
https://www.credit24.com.au/personal-loans/

Apply now:

Sources

¹ ABS – Living Cost Indexes
https://www.abs.gov.au

² ASIC MoneySmart – Budgeting & Financial Health
https://moneysmart.gov.au

³ ASIC – Managing Debt
https://moneysmart.gov.au/managing-debt

⁴ MoneySmart – Emergency Funds
https://moneysmart.gov.au/saving

⁵ ASIC – Insurance & Superannuation Basics
https://moneysmart.gov.au

⁶ Energy Made Easy – Australian Government
https://www.energymadeeasy.gov.au

⁷ ABS – Consumer Price Index (Food)
https://www.abs.gov.au

⁸ State Library & Council Services Australia
https://www.nla.gov.au

⁹ ASIC – Digital Money Tools
https://moneysmart.gov.au

¹⁰ National Debt Helpline
https://ndh.org.au

Disclaimer

IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839. The information in this article is general in nature and does not consider your objectives, financial situation, or needs. Lending criteria, fees, and charges apply. For product details, eligibility requirements, and full terms and conditions, visit www.credit24.com.au.

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