Five ways to save money at home

Five ways to save money at home

Cost of living increases are crunching Australians’ budgets. Last calendar year, Australians spent $642 billion on general living expenses, according to ASIC’s MoneySmart. 

But you can reduce your household expenses – and save thousands – far more painlessly than you might imagine.  


If you’re a mortgage holder, it’s worth shopping around for a good deal. Interest rates are low and lenders are hungry for business – several are discounting rates, waiving fees and offering incentives to win new business. 

But what matters most when it comes to comparing home loans is not the size of the discount, but rather the rate of interest and fees charged. A 1 percent discount might hook you in, but by shopping around you could potentially find rates that are well below the discounted rate on offer.

If you can find a more suitable home loan option, talk to your lender as they may be more willing to negotiate than you think.


Food and drinks cost us between $10,700 and $14,500 a year, not including alcohol, research shows.

We all have to eat, but grocery shopping and dining out are big expenses that can be easily reduced. There are plenty of ways to cut back on food bills, such as planning meals in advance and only buying what you need so to avoid waste, using a shopping list and shopping smarter.

If you can’t tear yourself away from restaurants, do breakfasts, or look for cafes that do BYO.


Along with housing costs and food, transport is one of the biggest costs in most household budgets. 

Cars are one of the biggest wealth suckers on the planet and their values can fall fast. Aside from the initial purchase price, things like petrol, registration, car insurance, parking and servicing all add up. For many of us, there’s the added cost of servicing a personal loan.

Experts recommend opting for second-hand vehicles to avoid the depreciation tax. But you may also find significant savings by shopping around for the best deals on petrol, comprehensive car insurance and your car loan.


Household expenses can quickly add up, especially with the price of electricity. So pay attention to your bills and cut down where you can. 

Technology is a big one – most people have separate mobile phone and internet packages and many consistently go over their limits and end up paying hefty fees and over-limit charges. Technology is much cheaper now than it was a few years ago, so shop around for plans that suit your circumstances.

Put your savings to good use

You can potentially save thousands of dollars of each year by taking a good look at your budget. The key is putting those savings to good use. 

A scheduled deposit into a high-interest savings account can be a good way to build a savings pool or, if you have a home loan, an offset account may be a more sensible plan. Compare savings rates online at RateCity or for advice talk to a financial planner or your accountant.



Did you find this helpful? Why not share this article?



Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy


Learn more about savings accounts

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.