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 increased in recent years, which can place pressure on household budgets — even for people with steady incomes.¹

Improving how you manage money does not need to involve complex systems or major lifestyle changes. By building a few simple habits and reviewing your spending regularly, you can gain a clearer understanding of where your money goes and identify areas where expenses may be reduced.

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 that may help you stay on track

Later in this guide, we also explain how personal loans — including those offered by Credit24 — work and what to consider before applying, so you can decide whether credit may be appropriate for your circumstances.

First, Understand Your Financial Position

Before you can manage money effectively, it helps to understand your current financial situation.

Know your numbers

Start with the basics:

Income

Salary or wages
Casual or freelance income
Government payments (such as Centrelink)

Expenses

Fixed expenses (rent, utilities, insurance)
Variable expenses (food, transport, subscriptions)

Debts

Credit cards
Personal loans
Buy now pay later services
Car loans

Savings

Emergency savings
Savings accounts
Offset accounts

This exercise can help you see where your money is going and identify areas that may need attention. The Australian Government’s MoneySmart tools can be a helpful starting point for reviewing your financial situation.²

Calculate your net position

Your net position is a simple calculation:

Assets – Liabilities

Assets may include savings, investments, or property. Liabilities include debts such as loans or credit card balances.

The goal is not perfect accuracy — it is gaining a clearer understanding of your financial starting point so you can set realistic goals.

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 make it harder to progress toward financial goals, particularly if interest costs are high.

Start by listing all debts, including:

Outstanding balance
Interest rate
Minimum repayment

Some people choose structured repayment approaches such as:

Avalanche method
Focusing on debts with the highest interest rate first.

Snowball method
Paying off smaller balances first to reduce the number of debts.

If you have multiple debts, some people explore debt consolidation. Before applying for any new credit, it is important to compare the total costs, fees, and repayment obligations and ensure the repayments would remain affordable.

2. Build Financial Resilience

Financial resilience refers to your ability to manage unexpected expenses or income disruptions.

An emergency savings buffer may help reduce financial stress when unexpected costs arise.

Emergency fund basics

Some households aim to build savings covering several months of essential expenses
Starting small can still make a difference — even regular small contributions can accumulate over time
Keeping emergency savings separate from everyday spending may make it easier to maintain

MoneySmart notes that building emergency savings may help some households manage unexpected expenses without needing to rely on credit.⁴

Helpful habit

Many people automate transfers on payday to move a portion of income into savings.

https://www.credit24.com.au/blog/pay-yourself-first

3. Protect Your Financial Future

Money management is not only about managing current bills — it also involves planning ahead.

Areas worth reviewing periodically include:

Insurance

Health insurance
Income protection
Car insurance
Home or contents insurance

Superannuation

Employer contributions
Fees
Investment options

Government incentives

Super co-contributions
Tax concessions

ASIC encourages consumers to review financial products such as insurance and superannuation periodically so they understand their coverage, costs, and options.⁵

How to Reduce Cost of Living in Australia

Reducing expenses often involves reviewing existing spending and identifying areas where costs may have increased over time.

Housing Costs

Housing is usually the largest household expense.

Practical steps may include:

Reviewing rent or mortgage arrangements periodically
Comparing energy providers
Adopting energy-saving habits at home

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 comparison tools such as Energy Made Easy can help households compare available energy plans.⁶

Groceries and Food

Food costs have increased across Australia in recent years.⁷

Strategies some households use to manage grocery spending include:

Meal planning before shopping
Using shopping lists
Buying home-brand products
Shopping seasonal produce
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 expenses can include fuel, maintenance, insurance, and registration.

Ways to review these costs may include:

Comparing public transport and car ownership costs
Adopting fuel-efficient driving habits
Scheduling regular vehicle maintenance
Reviewing insurance policies annually

Using faster payment services such as Osko (where supported) may help payments be received more quickly, although you should still allow time for processing before due dates.

Tips to Reduce Expenses Without Sacrificing Lifestyle

Saving money does not necessarily mean eliminating all discretionary spending. Instead, many people review expenses that provide limited value and redirect spending toward priorities.

Possible strategies include:

Reviewing subscriptions every 6–12 months
Comparing phone, internet, and insurance plans
Using loyalty programs or discounts carefully
Exploring free or low-cost entertainment options

Libraries, community centres and local councils often offer free resources and events that may help reduce everyday costs.⁸

Helpful read:

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

Digital Tools to Manage Money Better

Technology can make it easier to track spending and build budgeting habits.

Examples of commonly used tools in Australia include:

MoneySmart Budget Planner – a government budgeting tool
Frollo – spending tracking and categorisation
WeMoney – credit score monitoring and financial insights
Budgeting apps that provide alerts and spending summaries

ASIC notes that digital budgeting tools can help some people improve financial awareness by making spending patterns easier to track.⁹

Getting Professional Help

If financial pressure becomes difficult to manage, speaking with a professional may help you understand your options.

Free services are available, including:

National Debt Helpline1800 007 007

Financial Counselling Australia

MoneySmart financial guidance

Financial counsellors may help with:

Understanding hardship options
Negotiating with creditors
Creating realistic repayment plans

These services are independent and confidential.¹⁰

Credit24: Understanding Personal Loan Options

Sometimes unexpected expenses occur even with careful budgeting. In some situations, people consider personal loans after reviewing alternatives and assessing whether repayments would be manageable.

Credit24 offers personal loans between $500 and $10,000.

Before applying for any loan, it is important to consider:

Fees and charges
Repayment obligations
Your ability to meet repayments without financial difficulty
Whether other options may be available

Applications with Credit24 are completed online and assessed according to lending criteria.

You can learn more here:

https://www.credit24.com.au/personal-loans/

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
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 National Library of Australia and State Library Services
https://www.nla.gov.au

⁹ ASIC MoneySmart – Budgeting 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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