How to spend your money in 2021

“Beware of little expenses; a small leak will sink a great ship.” Benjamin Franklin.

In the first bootcamp challenge, we focused on managing savings.

For week two, we’re focusing on spending, and how to get the best value from every dollar you spend.

Spending is a lot more fun than saving, but getting a grip on your cash-splashing antics will help you in the long run.

As the saying goes, “rich people stay rich by living like they’re broke. Broke people stay broke by living like they’re rich”.

But, as we said in week one, this isn’t about cutting the fun out of life. It’s about understanding how you spend your money and learning how to spend it correctly, so it can ultimately lead you to financial freedom.

Here’s this week’s plan to analyse your spending.

ACTION: Understand what you’re spending

If there’s one thing many millionaires have in common it’s that they’re thrifty, and they know exactly how much they spend.

So let’s join them.

A simple – but often confronting – way to track your spending is to log into your online banking and print out your bank statement for the last month.

Then, take two highlighters, and highlight what was a fixed expense, like an electricity bill or a rent payment, and what was a discretionary spend, like a subscription or a takeaway coffee.

Once you’re done, take a good hard look with one question in mind: What can I cut?

Write down everything that springs to mind. Then ask yourself these three questions:

  1. What are the most obvious ones to start with?
  2. Do any of these bring joy to my life?
  3. Is this subscription helping me hit my personal, career or financial goals?
  4. Do I need to cut back on all of these, or just some?

If you’re noticing a takeaway coffee expense twice a day every day, you might want to rethink your cuppa. Two coffees a day at the average price of $4 is about $1,040 per year.

If you’re paying a subscription to a magazine or online news site that you’re no longer interested in reading, cut it. One call or one email will stop that money leaking out of your bank account.

However, if your Spotify subscription gets you through the week, or you love Netflix too much to quit, keep it.

Remember, you don’t need to get rid of every excess expense in order to be financially successful.

ACTION: Get a budget tracker

Everybody needs a budget tracker in their life. It makes life simpler and could ultimately make you richer!

You can use a free budgeting app, like Pocketbook, or your bank might already have a linked budget tracker. Commonwealth Bank has a Spend Tracker, while ANZ has its Spendi feature that tracks your spending too. If you’re with NAB, you can track your spending via their expense tracker function.

If you prefer to do it manually, you can get a little black book for your expenses and write everything down. Microsoft Office has a bunch of free downloadable budget templates you can check out here.

If you choose to do a monthly budget from scratch, you might find it easier to split your pay into fixed expenses (like rent and bills), discretionary expenses (like clothing or entertainment) and savings.

Set a spend limit for your fixed and discretionary expenses, and a savings goal.

Keep a daily record of your expenses so you can see exactly what category they fall into, and when you’ve reached your spend threshold.

TIP: Set a realistic budget, and leave some leeway for surprises. You might have an unexpected vet visit or dentist appointment, and you don’t want your efforts to be derailed because of it.

You can also combat surprises by setting aside a small portion of your pay into a different account labelled “emergencies”. This could be $50 to $100 of your pay – or whatever you can afford. Factor this into your budget, and that way you’re always prepared.

ACTION: Reduce your expenses

Bills are a part of life, but by shopping around, you could save yourself a huge amount of cash. Loyalty to providers often doesn’t save you any money.

The biggest pocket pinchers are utilities – electricity, water, gas. The consumer watchdog also recently found that Aussies who turned their backs on the top three energy retailers (AGL, EnergyAustralia and Origin) often got a better deal.

If you want to compare your bills, you can use sites like Compare the MarketCanstar BlueiSelect, and Energy Watch.

You can even use the Government’s own energy comparison site: Energy Made Easy.

Mobile phone plans, internet providers and gyms will often match cheaper prices – particularly if they think you’re going to walk away from them to do it. One phone call can save you hundreds every year.

And it doesn’t stop at fixed bills. If you want to shave money off your grocery bill, shop around.

The weekly specials at Aldi, Coles and Woolies all vary. So, before you head out, read their catalogues to see what’s on special where, and plan your shop accordingly.

Many of us are also guilty of the “hangry shop”. That is, shopping when you’re hungry, and ultimately buying more because your eyes are bigger than your stomach.

Some shoppers have found they save around $50 on each shop by using Click and Collect, because it stops random spending once you’re at the grocery store. And, you can eat at home while you shop.

ACTION: Use coupons and cashback

Shopping doesn’t need to be expensive.

A great way to make sure you’re getting more bang for your buck is to compound your savings when you spend.

Retailers are always putting sales on their products. For big events like Click Frenzy, Black Friday and Cyber Monday, comparison site often reveals the biggest and best sales before they happen. They also reveal the best sales of the week every week.

Another money saving gem is cashback. It’s a relatively new concept in Australia but has been pretty popular in the US and Asia for quite some time now.

Essentially, cashback offers give you money back when you buy via their site or their extension on any online platform.

For example, you’ve likely heard of Shopback, which is an app that partners with retailers to give customers a percentage of their spend back to them when they go through the app.

You can also check out Cash Rewards and Kickback, which also offer cash back for shoppers.

There’s generally no sign on fees for shopping with cashback platforms, and they make their profit off the partnering retailer because they bring them business.

What’s even better is often the retailer has its own sale, which you can then compound with a cashback offer to save the most amount of money when you spend! It’s a win win scenario!

ACTION: Get the right credit card

If you’ve got a credit card, or you’re looking at getting one, there are some things you need to consider first.

You need to decide on what you really want from it: is it just for emergencies? Is it so you can earn frequent flyer points? Do you want to earn cashback for shopping?

There are so many different cards on offer, but one thing’s for sure. If you’re going to be using it, you want something with a low interest rate.

You don’t know what kind of financial hurdles you may face in life. So, if you find yourself in a situation where you can’t pay off the full balance every month, and therefore incur interest, at least you’ll be paying a low interest rate on that amount.

However, if you think you aren’t likely to use it often, and you just want to have it for emergencies, then you might want to consider a card with a low annual fee.

These types of cards tend to have higher interest rates, but if you’re only going to be using it for a once-off big purchase, then this could end up saving you more in the long run.

Offers and cards change all the time, so you need to make sure you’re comparing the available credit cards out there.

You can use a comparison site like to see what’s out there. Or, you can check out this article, which may help you decide what kind of credit card is right for you.

If what we’ve discussed above sounds good, this week’s challenge includes some additional things you may want to try. Remember, you should always seek professional advice in relation to your personal financial circumstances before you commit to any financial strategy.

So now it’s time for your challenge: Track your spend


  1. Log on to your online banking
  2. Open up your previous month’s bank statement
  3. Print the bank statement off
  4. Get two highlighters. Highlight your fixed expenses, and your discretionary expenses
  5. Make a list of all your discretionary expenses
  6. Ask yourself what you can cut, and whether you need to cut it
  7. Cancel any subscriptions you don’t need, or rarely use
  8. Remove any excess discretionary spending from your budget.


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