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5 expert tips to save money on a low income

If the average Aussie lost their job, they’d be out of money in a little over three months.

Composite image of saved money being put in a jar, and a woman smiling while looking at bills and using a calculator.
Living on a low income doesn't mean you can't save money. (Source: Getty)

The average Australian has about 14 weeks' worth of living expenses in their savings account, according to new data from Finder.

This means, if the average Aussie lost their job, they’d be out of funds in a little over three months. The December update from Finder’s Consumer Sentiment Tracker also revealed the average amount saved per month fell from a high of $953 in January 2021 to just $655 in December 2022.


It’s clear the recent cash rate increases and resultant inflation have forced many Aussie families to drain their savings safety net. With high inflation due to remain and more cash rate increases likely in 2023, now is a good time for Australians to find more opportunities to save money - especially those on a lower income.

Here are five easy ways to make a start:

1. Tackle your debt

The easiest way to save is to cut your spending, and often the most effective way to do that is to consolidate any debt on which you are paying interest. It’s best to start with the highest-interest debt first – that usually means credit cards.

The current average credit card interest rate, according to Reserve Bank of Australia (RBA) data, is almost 20 per cent. This means every $1,000 in debt you don’t pay off could be costing you $200 per year.

This is why it’s always best to pay off your credit card in full each month. If that’s not an option, transferring your outstanding debt to a zero per cent balance-transfer card - ideally with a lower purchase interest rate - is a great option. For example, Bankwest’s Breeze Mastercard currently offers zero per cent interest on your balance for 15 months and only 9.9 per cent thereafter.

If you do transfer your balance, it’s best to hold off on purchasing anything new with your card until you’ve paid off your card in full.

2. Open a new savings account (or 2)

The one benefit of a higher cash rate is higher savings account rates. However, making sure you're earning the highest interest available can often involve a lot of legwork.

A way to make this whole process easier is to open more than one savings account. As they generally have no fees, there is no limit to the number of savings accounts you can open in your name. Having more than one account means you have more than one interest rate option.

I have five savings accounts. Right now I’m keeping all my funds in my UBank account because they are offering the best ongoing rate on the market - 4.10 per cent. You can check the current market leader at any time on Finder’s savings account comparison guide.

3. Set up a regular direct debit

The best ongoing savings rates often can only be unlocked if you save a certain amount each month. It’s easy to guarantee that you fulfill that criterion by setting up a direct debit.

For example, the UBank account requires a $200 deposit each month to unlock the bonus rate. Thankfully, a $200 per month (free) regular transfer between your main bank and UBank guarantees that you will never have to think about it again. The added benefit here is that you know you’re topping up your savings account on a regular basis.

4. Shop around for cheaper insurance

As part of Finder’s awards program, our Insights team analyses pricing data from hundreds of insurers across Australia. One of the ways we gather the data is by calling up insurers and asking for quotes for people based on a range of personas. The variation in prices quoted for the same persona is often staggering.

For example, quotes for car insurance for a 40-year-old female in NSW ranged from $1,018 to $1,326. Quotes for a 30-year-old male in Queensland ranged from $761 to $1,394. Life insurance quotes followed a similar pattern. Prices quoted to cover a 30-year-old female non-smoker ranged from $288 to $626 per year, and quotes for a 40-year-old male smoker ranged from $688 to $1,539.

This is why it pays to shop around for a new insurance provider every couple of years as the prices charged by insurers across Australia can vary hugely. You can check out Finder’s awards page to see which insurers come out on top for value.

5. Don't forget your super

Finally, your superannuation is probably the most important fund for you to enjoy your retirement. While that may seem a long way away for many, taking some positive actions when you’re young can pay huge dividends later in life.

Taking a little time to make sure you are with one of the best-performing super funds can make a big difference. While the best-performing superannuation funds in Australia returned about 7 per cent annually over the past 3 years, the worst-performing funds actually lost money.

If you are on a low income ($37,000 or less), you could be eligible for a low-income superannuation tax offset, meaning the Australian Government will contribute to your super fund up to a value of $500 per year.

Overall, no matter how your finances are looking today, a little work now could put you in a far better position at the end of 2023.

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