Managing money can feel difficult, particularly when you’re dealing with debt, rising living costs or unexpected expenses. The good news is that small, practical changes can make a real difference. Having a clear plan for your money can help you reduce financial stress, manage debt and feel more in control of your finances.

Here are six simple steps to help you manage your money better and work towards getting out of debt.

1. Create a realistic budget

Start by understanding exactly how much money is coming in and where it is going. List your regular expenses, including rent or mortgage, groceries, bills, transport, insurance, subscriptions, entertainment and debt repayments.

Be honest about your actual spending, rather than what you think you should be spending. Separate needs from wants and prioritise essential expenses first.  A budget doesn’t have to be complicated. Our free budget planner can help you get started.

2. Take control of your spending

Small expenses can quickly add up. Review your spending and look for areas where you could cut back, particularly on non-essential purchases.

Avoid being tempted by upgrades, sales or impulse purchases. Spending according to your budget can help you avoid taking on more debt.

It can also help to set up separate accounts for regular bills, everyday spending and savings, with automatic transfers after payday.

3. Make a plan to reduce your debt

If you have loans, credit cards or Buy Now, Pay Later (BNPL) accounts, understand how much you owe, what your repayments are and what interest or fees you are paying.

Where possible, avoid using credit to pay for everyday expenses or taking on new debt to repay existing debt. Credit cards and short-term lending can become expensive when balances are not paid off.

A clear debt repayment plan can help you focus on reducing what you owe while keeping essential expenses covered.

4. Build savings for unexpected expenses

Even small amounts of savings can provide an important financial buffer. Unexpected car repairs, medical expenses, household bills or other costs can quickly put pressure on a household budget.  Consider setting up an automatic transfer to a separate savings or emergency fund each payday. You may be surprised how quickly small, regular amounts build up.

Remember, every little saving helps.

5. Protect yourself and review your finances regularly

Scams, rising costs and unexpected changes in circumstances can all affect your financial wellbeing. Be cautious about unsolicited offers, unusual payment requests and opportunities that seem too good to be true. Scamwatch provides useful information about common scams and how to protect yourself.  It’s also worth reviewing your budget regularly. Think about what worked, where you struggled and what you could change. Your budget should reflect your circumstances as they change.

6. Ask for help if debt becomes difficult to manage

If your income is no longer covering your essential expenses and debt repayments, don’t wait until the situation becomes overwhelming. Free debt help and financial counselling are available in Australia.

Contact your bank or lender to discuss your situation and ask whether financial hardship assistance may be available. You can also speak with a financial counsellor about your options.

There is no shame in asking for help. Getting support early can make it easier to understand your options, manage financial stress and develop a plan to move forward.  Managing your finances is not about getting everything right overnight.

Small, consistent changes to your everyday spending, saving and debt repayments can make a meaningful difference over time. Every little saving helps, and putting these simple steps into practice regularly can help reduce financial pressure and put you on a stronger financial footing.

It’s one thing to set a budget, but quite another to stick to it. However, at Way Forward we know from experience that sticking to a budget is one of the most important keys to financial wellbeing. Our clients tell us what a relief it is to have a workable budget that helps them pay off their debts while also meeting their current needs.

We’ve noticed three key spending habits that can wreak havoc on personal budgets. Read on to learn how you can avoid falling into some of these traps.

Ignoring the real cost: Tap and go is a convenient payment method, but it distorts our sense of the true cost of goods and services. This disconnection from reality is magnified when we use our phones to make payments, and it becomes easy to forget that we are actually spending money every time we tap and go. If you find yourself trying to justify your spending, hiding receipts, or making a large number of purchases in one shopping trip, it’s worth thinking about whether ignoring the real cost of goods is pushing you towards financial difficulty.

Using tomorrow’s money: With the rise of buy now, pay later (BNPL) and wage advance products, as well as easy access to credit, it has become very tempting to use tomorrow’s money before you even have it. However, this spending habit can quickly lead to becoming trapped in the debt cycle; if you’re regularly using BNPL or wage advance products to pay for essentials like food, medicine, housing or electricity, it’s important to reach out for help before things get worse. In June 2023, there were 200,000 more credit card accounts than there were 12 months prior, which suggests to us that this is a very common problem.

Buying for the sake of it: Impulse purchases provide a momentary high but often lead to regret, and are rarely for goods and services that we actually need. Try to determine the reasons behind your impulse buying – perhaps you’re bored, in need of some social connection, or you’re shopping for entertainment. Way Forward client Sue developed unhealthy online shopping habits during COVID lockdowns: “I knew that it was getting out of control when my repayments were more than I could afford. I talked to a counsellor and realised that my online shopping was an addiction. I didn’t necessarily need the stuff that I was buying”. If this sounds like you, know that help is available and you’re not alone.

Building better money habits

We’ve seen time and time again that these habits work. Our client Brian built better money habits and reached his goal of being debt free: “I’ve learned discipline: distinguishing wants from needs and using cash for essential purchases”. At Way Forward, nothing makes us happier than seeing a client move into the future without the burden of debt.

Instead of being stuck in habits that are bad for your budget, focus on developing new money habits that will lead you towards financial wellbeing. Here are five steps you can take towards more intentional spending and a healthier savings balance.

1. SAVE: Make sure you have the money before you make the purchase. Create categories in your budget so that you’re saving for expenses like gifts, entertainment, and clothing throughout the year. But don’t stop there – look at how much you’re spending on each gift and consider inexpensive and creative options that prioritise spending time together, creating memories or appreciating the simple things in life.
2. STYMIE: Create some friction in your financial routines and make spending money harder. That might mean removing payment options from your phone or web browser, or putting savings into a bank account that you can’t access when out and about. Some people even put stickers on their credit cards to remind them of their financial priorities at the point of purchase.
3. SLEEP ON IT: Let your purchases spend 24 hours in the shopping cart before you hit “confirm purchase”. You’ll be surprised how often the initial excitement wears off and you no longer want what yesterday had seemed like such an essential purchase.
4. SWITCH: Start using a debit card instead of a credit card so that you can only spend money you already have. This means you can’t accrue credit card debt (and frees you from the associated high interest rates) – you won’t miss the unpleasant surprise each month!
5. STOP: It’s one thing to set a budget, but quite another to stick to it. However, at Way Forward we know from experience that sticking to a budget is one of the most important keys to financial wellbeing. Our clients tell us what a relief it is to have a workable budget that helps them pay off their debts while also meeting their current needs.

Feeling overwhelmed?

If you are experiencing financial difficulties, you’re not alone. Every day, the Way Forward team talks to people just like you who have found themselves struggling to repay debt.

Our clients are people who have experienced unexpected challenges like illness or addiction, unemployment, relationship breakdown or are financially overcommitted. Many remark that they never expected to find themselves in this situation, but they all share the same determination to become debt free.

We are here to help you find a way forward, and our services are free to clients. Let today be the day where you make a positive change – call us now to begin your journey towards financial freedom.

Australian wallets and bank balances are being hit from all angles.

The pandemic alongside natural disasters across Australia continue to challenge us, with many people who were previously coping being pushed into financial difficulty and those who were already struggling finding it even harder to stay on top of their expenses.

News headlines tell a story of mounting credit card debt, people are turning to BNPL to pay for essentials like food or petrol. Inflation is growing, wages lagging and many feel the pinch or are falling into financial hardship.

But there are simple steps anyone can take to futureproof their bank balance.

Our team of Financial Hardship Advocates support hundreds of Australians every week who are experiencing hardship. Our advocates not only help rebuild financial confidence and stamina but also, specialise in building detailed household budgets for each client to follow.

Hence, they have many budgeting tips up their sleeves, which we wanted to share to help people get through this financially stressful time.

Here are our top 20 money tips to protect your budget.

1. Talk about money.

Discussing money and debt should not be taboo. Whilst it may feel embarrassing or difficult to talk about your finances, it is the first step to collectively solving some of the challenges you might be facing.

This doesn’t mean you have to chat through the ins and outs of your bank balances, debts and financial aspirations every day. Rather, it means building a habit around open, honest conversations around money will help you to pay attention to this aspect of your life and raise issues with the right people when you need help, advice or just someone who’ll listen.

If you’re losing sleep over money, discussing your situation is the first step to finding the support you need. There is no reason to struggle in silence as help is out there.

Talk to someone, be it your partner, family, friends or a lender or service provider.

2. Budget is your financial shield.

Preparing a household budget can sound challenging but it’s the best way to know in detail how much money you have coming in and where your money is going.

The more detail, the better. Adding accurate data or close estimates of how much you spend on things like haircuts or car maintenance will allow you to have a complete overview of your household spend – even for expenses you might not think too closely about but still pay for.

Many online budgeting tools are available, like our free interactive budget planner, that do most of the heavy lifting for you.

A word of caution though: a budget is merely a tool that helps you understand at a point in time what you could do with your finances. A lot of people prepare budgets but don’t use them afterwards. That’s fine, the objective of working out a budget is to help set some rules or boundaries on how much you need to allocate for expenses like the weekly grocery shop, how much you need for regular bills and importantly, how much to save or spend on enjoying your life.

3. Your income should cover your expenses.

Many clients come to Way Forward after landing in financial trouble for a seemingly simple reason: they’ve spent more money than they earn, sometimes without realising.

This is where a household budget is helpful, as it gives you a clear idea of how much money you have left after you’ve paid for the essentials.

If your personal circumstances have recently changed and your income decreased, ask for assistance before things escalate. Whilst you may be able to manage income changes in the short-term by using savings or more credit, the situation can quickly deteriorate.

You can also go through your budget to see where you could cut back – monthly subscriptions, take away meals and entertainment may be good places to start.

4. Revisit your budget.

Life situations change constantly, which will impact your household budget. It’s a good idea to revisit and adjust your household budget regularly, be it monthly, twice a year or once a year. The cadence depends on how much your financial situation is likely to change over time or if there have been big rises to regular expenses like petrol.

You can download our Budget Planning Excel Spreadsheet if you want to save a copy of your household budget and keep updating it when needed.

5. Consider family finances everyone’s business.

If you have dependants or share finances with a partner, ensure everyone is clear on roles and responsibilities. Open discussion about money helps to avoid any surprises along the way. For couples, we recently outlined tips how to handle money with a partner in our blog.

As a parent, consider how much detail to share with your children about family finances. Discussions about money are part of financial education and parenting so don’t be afraid to bring up the topic when needed.

6. Set up a bills account.

We all have expenses that can take us by surprise, for example car registration or electricity and gas. To combat this, figure out your big bills and save towards them ahead of time using automated transfers to a separate bills account.

You can then access funds from your bills account when big expenses land. This will help you avoid using credit – and protect you from financial hardship in the long-term.

7. Don’t touch your savings.

If you find yourself regularly dipping into your savings, consider opening a savings account with another bank so you’re less likely to touch the funds.

Setting up a savings account with automated transfers on payday is another great way to save money, hassle free.

8. Pay attention to your credit scores and reports.

Credit scores and reports are important because they can determine the availability and terms of credit you can access.

Everyone has the right to one free credit report per year from each credit reporting body (there are three in Australia). Credit reports include comprehensive information that credit providers assess when you apply for a loan, or other forms of credit, so it is important to check each report for any errors.

Read more on credit scores and credit reports on our website.

9. Pay attention to rising prices.

Lately we are seeing increasing prices of everyday items like food and petrol. As some prices are going up significantly, pay close attention to how much this is impacting how you allocate your regular spending boundaries.

For example, if your groceries spend is increasing and your household income is staying the same, the money needs to come from somewhere. Make conscious decisions on where adjustments need to be made to meet these changes.

10. Pay off credit cards.

Credit cards can put a strain on personal finances quickly, as most credit cards attract high interest rates of up to 20%.

For context, most clients who land at Way Forward have credit cards that have crept up and eventually become unmanageable, as they can’t reduce the debt with such high interest rates.

Approximately 60% of the client debt we manage is credit card debt and clients come to Way Forward with around 5 unsecured debts (3/5 being credit cards). Without intervention, growing credit card debt increases people’s likelihood of falling into financial hardship. This is why it’s best to get on top of your credit card debt sooner rather than later.

See more on our debt info page on credit cards.

11. Avoid using credit to pay credit.

Taking on more credit to pay for credit can quickly land you in financial hardship. As most of the short-term credit options have surprisingly big interest rates, you can easily get in trouble maxing your credit limits or picking up more credit to pay the bills.

12. Set financial goals.

It will be easier to stick to a budget or a savings plan if you have long-term goals in mind. Setting clear goals keeps most people on track and makes the whole process feel more enjoyable.

It’s about flipping to a positive mindset instead of dwelling on the negatives.

13. Embrace money savvy fun.

Being smart about your finances doesn’t mean you need to stop enjoying life. For example, holidays don’t need to break the bank. Australia is blessed with countless options to enjoy our time at little to no cost – from museums to galleries, festivals, parks, beaches and so on.

Set a realistic budget for your next holiday and try to stick to it. It also means you might afford more trips in a year if you’re being smart about your holiday budget.

Same goes for shopping, clothes, entertainment, eating out and so forth. Once you start exploring affordable options, you’ll realise there are plenty of ways to enjoy life to the full, without overspending or using credit.

14. Patience pays off, always.

Often people might buy a big item like a new TV, laptop or a holiday using credit. The better, safer way is to plan for big purchases and once you can afford it, buy it.

Buying a costly item like a new laptop on credit might seem a great idea in the moment but might leave you financially vulnerable or be more costly than you initially thought due to the high interest rates. You could also still be paying that item off long after it’s been purchased and then replaced.

Before taking on debt, ask yourself how long it will take you to pay off the purchase and how much will you eventually pay with the interest rates or other payment terms. Is it worth it?

15. Explore discounts with lenders and service providers.

Contacting your lenders and service providers to negotiate a better deal is a guaranteed trick to save money. This includes your gas, electricity, Internet, mobile phone bill as well any insurance policy.

If your provider won’t offer a better deal, do your research to establish if a competitor might.

16. Be curious, search for answers

Money, credit and debt can be complicated and nobody expects you to have all the answers.

But do your research before making financial decisions like a mortgage or investment. Sign up for a course or read widely about relevant topics but ensure you check the source.

There are many entities with vested interests when it comes to money. So make sure you know where the advice is coming from and whether to trust it. We recommend Australian government sources (like MoneySmart) and ABC Money for impartial advice, news and education around finances.

17. Budget for the long-term.

Many people have a short-term view when it comes to their finances and live paycheck to paycheck. This can leave them vulnerable to financial hardship when unexpected items pop up.

For example, if you get paid monthly, you might budget for the month ahead but forget to consider the big bills that come through less frequently. This is when you might be hit with an ‘unexpected expense’ as you didn’t save up for the expense before it was due.

This is where the Way Forward budget planner comes handy as it encourages you to take a longer-term view to money and understand the monthly/bi-weekly cost to an infrequent expense.

18. Speak to the provider when you can’t pay a bill.

Most lenders and service providers have hardship teams and options to offer their customers unable to pay. Speak to your provider immediately when you’re struggling – tackling the issue early on will also limit impacts to your credit rating.

19. Watch out for scams.

Investment scams have been on the rise in recent years and usually involve promises of big payouts, quick money or guaranteed returns. ScamWatch recommends to ‘always be suspicious of any investment opportunities that promise a high return with little or no risk – if it seems too good to be true, it probably is – and is highly likely to be a scam’.

Another scam to watch out for money recovery scams targetting people who have already lost funds to a scam and promise help to recover losses after paying a fee in advance.

Up-to-date information is available at ScamWatch, a service provided by the Australian Government.

20. Ask for help early.

One of the biggest one regrets our clients have is not asking for help earlier. Many tell us they lived through months of sleepless nights and added credit on top of credit to stay afloat before finally asking for help.

If you’re struggling with finances, be it paying for bills or your debt repayments, the best thing to do is to ask for support sooner rather than later.

Talk to your friends and family or contact service providers to explain your situation and see what help they can offer. You can also speak to a Financial Counsellor for advice or seek help from an organisation like Way Forward to get out of debt faster.

There is no reason to struggle alone as help is out there.

Way Forward helps clients in three simple steps:

Step 1: We evaluate your circumstance and financial situation.

Step 2: We take over negotiations with creditors and act your behalf.

Step 3: We put together a manageable repayment plan and budget. You make one reoccurring payment to us that we then distribute to all creditors, 100% of which goes towards reducing the debt.

If you’re stuck, get help. Pick up the phone and ask for support. Find out if we can help you.

Use our free budget planner or debt repayment calculator.

Struggling to pay for the essentials such as food and rent and want to know more about your options? Our emergency funding page lists some of the available free emergency services and funding if you live in Australia and find yourself in financial difficulty.

Knowing that money and finances can cause strain in a relationship, we wanted to share our top 5 tips how to better manage money as a couple – so you can minimise money stress and focus on what matters most in your relationship on Valentine’s Day and beyond.

1. Learn to have open conversations about money

The more open, honest and frequent conversations about money you have with your partner, the better.

This doesn’t mean you have to discuss the ins and outs of your bank balances, debts and financial aspirations every day. Rather, it means finding a format and cadence for discussion that feels fair and works for both parties. Although it can feel challenging, try to take as much emotion out of the conversation as possible to ensure you’re being constructive.

But with money being such a taboo, it can feel daunting to get started.

Here are a few conversation starters to inspire discussion about money with your partner:

• What are your long and short-term financial goals?
• How comfortable are you being open about money?
• How do you feel we could better handle our finances as a couple?
• How much debt do you currently have? How much debt are you willing to take?
• How do you feel about financial risk? How could we safeguard ourselves financially?
• What would happen if one of our financial situations changed?

If you’re having trouble getting started, suggest watching a finance documentary or listening to a podcast together, which might spark ideas and conversation. There are many to choose from on most streaming services.

As with anything, the more you do it, the easier it’ll become. Start small and build from that.

2. Create a household budget that works for both

Being across your household budget is an important part of staying on top of your finances and this goes for everyone.

If you’re in a relationship, consider the best way to create and maintain a household budget, be clear on roles and responsibilities and how much you are willing to share.

It’s completely fine not to combine your finances as long as you’ve talked it through and agreed how to divide mutual expenses and who is responsible for which bills. Many couples who’ve been together for years continue to keep their finances separate.

If you choose to combine your finances, one way to do this is to come together at a time where there are no distractions to review bank statements and bills to complete a budget. Many free online budget planners and apps are available or you could fill in an Excel spreadsheet like this one Way Forward uses with our clients.

When going through the budget, break down costs to weekly/fortnightly/monthly and set up direct payments for bills. This is also a great time to discuss current financial commitments. Can the other person afford to contribute equally? How would you feel if they couldn’t? Make sure your partner understands what she/he is responsible for and what you’ll take on.

Review the budget yearly or when there is a significant change to your situation – for example a job change or a new baby.

As a couple, co-creating a budget gives a detailed view of where your money is going and how much you both have left so you can understand your situation and make informed decisions about money together.

Even if you opt for separate bank balances, we still recommend both of you create a household budget, so you know where your money is going.

3. The art of compromise

We all come from different cultural and family backgrounds and have learnt different approaches to handling money, credit and debt. Hence, there will never be one correct way to combining finances with your significant other. This means you will most likely have to compromise – but the real trick is knowing how much.

There is no clear-cut way to tell if you’ve traded off too much when it comes to your finances but it might be worth asking:

• Do I feel heard in our conversations about money?
• Do our combined finances feel fair?
• Do I feel I can raise issues with my partner and she/he is open to change?

If the answer is no, it might be time to find a constructive way to address the matter. As with any financial problem, the longer you wait, the bigger the problem becomes, so try finding ways to address any imbalances as they arise.

4. See the warning signs of financial abuse

At Way Forward, we support hundreds of Australians in financial hardship and unfortunately, many of our clients have experienced financial coercion or even abuse. When you’re in the thick of it, it can be hard to recognise the signs.

Let’s begin with the definition. According to the Government’s financial guidance website MoneySmart:

“Financial abuse is when someone takes away your access to money, manipulates your financial decisions, or uses your money without consent … Financial abuse is a type of family violence. It often happens alongside other types of violence, such as physical or emotional abuse. It can leave you feeling vulnerable, isolated, depressed and anxious. It can also take away your independence.”

If you’re uncertain whether you’re a victim of financial abuse, ask yourself:

• Do I feel in control of my own finances?
• Do I need to ask for permission to spend money?
• Do I have access to my own earnings or bank account?
• Do I feel I can have an open, honest conversation about money with my partner or does the idea leave me nervous or even afraid?
• Do I feel my partner might be withholding financial information or even lying to me about money?

If you or someone you know might be experiencing financial abuse, ask for help. MoneySmart offers a helpful list of available community support services.

5. Read the fine print and seek independent advice

Building a life together means you are also building a financial life together. This will involve complex financial decisions and legal agreements, which should be carefully considered at all times. Regardless of the situation, always read through and fully understand documents you are signing, as they could have long-term legal and financial implications. You should never feel rushed to sign documents or make financial decisions. Seek independent financial advice from a lawyer or a professional advisor to minimise any risk.

Making big financial commitments together, for example applying for a mortgage or buying a new car, can be an exciting time as you build a life together as a couple. But it is worth playing devil’s advocate in these situations and asking… what if?

What if our financial situation changes and we can no longer make the repayments? What if one of us changes their mind down the track? Can we afford this commitment if we have a child together? Is this a long-term financial agreement or something else?

Have an open, honest conversation and evaluate all implications before making a decision. This way you’re both on the same page from the start and you can trust you’ve made the right choice for everyone, for the long haul.

Find your way forward, together

Each couple’s finances are as uniquely different as the individuals who make it – so there is no one way of co-handling finances with your loved one.

Finding your way to handle finances will ensure you can focus on enjoying your time together instead of worrying and arguing over money – be it on Valentine’s Day or any other day in the calendar.

 

---

How can Way Forward help?

At Way Forward, we cannot provide financial advice, but we can help manage and reduce your debt. We’re a completely free service and there are no hidden fees or costs. Our dedicated team of professionals are funded by some of Australia’s leading financial institutions, allowing us to help you find your way forward, faster.

If you are struggling to make ends meet, ask for help sooner rather than later to get what you need to manage your situation. A range of free support is available through government services, community organisations and charities like Way Forward so there is no reason to struggle on your own. Do your research and consider free services before paying fees or high interest rates, as these options may worsen your situation in the long term. We’ve compiled a helpful guide of free support and funding available in Australia.

How Way Forward can help in simple steps:

Step 1: Reach out to our team

Step 2: We evaluate your circumstance and verify your financial situation

Step 3: We take over negotiations with your creditors and act on your behalf

Step 4: We put together a manageable plan and combine your repayments to one reoccurring payment across your creditors

 

Find out if we can help you.

Struggling to pay for the essentials such as food and rent and want to know more about your options? Our emergency funding page lists some of the available free emergency services and funding if you live in Australia and find yourself in financial difficulty.