It’s no secret that the cost of living is becoming more, well … costly. Short of winning Lotto or securing a massive pay rise, making ends meet requires some skillful cost-cutting.

The best place to start is to take a good look over your finances to see where your money is going. From there, break expenses down into essentials, importants and luxuries.

• Also read: 10 tips to boost your savings this new financial year

• Also read: Save money without the sacrifice with these 5 cost-cutting swaps

• Also read: Top 5 money saving strategies for time-poor Aussies

Then, get to work on making positive changes using these simple tips and tricks:

1. Cut your spending

Reducing how much you spend may involve uncomfortable sacrifices – no more meals out, barista coffees or trips to the movies. However, there are ways to curb your spending that don’t involve going without:

• Use points - Spend credit card, frequent flyer, store card and loyalty points instead of your hard-earned money

• Spend gift vouchers - Don’t let that value expire unused

• Ask for discounts - Businesses don’t like losing customers, especially with a possible recession looming. Negotiate discounts, such as when using cash, pre-paying, or joining a subscription

• Shop around - Utilities, banks, and others often charge existing customers more than new ones – a ‘loyalty tax’. Don’t pay it out of ignorance. Shop around. Some even offer bonuses or cashback for switching

• Slash waste - Waste is spending money for no gain whatsoever. For instance, appliances left on standby chewing power, unnecessary loads in the car burning fuel, food leftovers going bad

2. Change your habits

Getting a different outcome (that is, lower costs) means doing things differently. For example:

• Pay with cash instead of cards - you’ll avoid overspending because you can only spend what you have withdrawn from the ATM

• Have groceries delivered rather than shopping in-store – saving time, fuel and avoiding temptations to impulse buy

• Change what you eat - cook at home more, eat less meat, use cheaper brands, stockpile on-sale items, cook in bulk and freeze meals

• Top up fuel on cheap days, not when the tank is empty

• Don’t go crazy as some prices start falling again – things may still get worse before they improve

3. Cancel the unnecessary

Chances are you’re currently paying for things you don’t really need. Are you actually using that gym membership regularly? Reading that subscription magazine? Using all those TV services? If not, cancel them.

Do you have unused items in storage? Sell or donate them. Are your insurances fit for purpose? Changing plans or dropping extras you no longer need could cut your premiums. Before you do, get advice from your insurance broker for car/home/contents/landlord insurance, and from a financial adviser for personal insurance – to ensure you retain the best cover for you.