The rising cost of living due to the high inflation rate has been hitting everyone hard, and you’re probably feeling the pinch, too.

If you’re looking for ways on how to save money during high inflation, this list is for you. We’ve rounded up ten areas where you can cut back without making huge sacrifices. 

We hope that after reading this article, you will examine your spending habits more closely and identify areas where you might be overspending. Making small adjustments can free up some cash and give your budget a little breathing room.

10 daily expenses to cut back on

1. Dining out and takeout

According to a study, the average Aussie eats out about three times a month and orders takeaway five times a month. With the average meal costing anywhere from $5 to $15, that’s $190 to $570 per person annually.

If you factor in the after-work drinks or weekend cocktails, where an average household spends $32.2 per week, that’s an additional $1,674.4 annual expense.

We’re not saying you must give up your favourite restaurants or never order takeaway again. But even swapping one restaurant meal a month for a home-cooked dinner can significantly impact your budget.

2. Subscriptions and memberships

From streaming services like Netflix, Disney+, and Stan to gym memberships and magazine subscriptions, these recurring expenses can quietly drain your bank account. In fact, the average Australian household shells out $57 a month on digital entertainment alone, which amounts to $684 annually.

To save money in this area, explore alternative options like sharing a family plan or using ad-supported versions of streaming services. These services cost less than regular subscriptions.

3. Impulse purchases

If your quick trip to the shops for a few essentials turns into a basket full of things you didn’t even know you needed, you’re not alone. The average Australian spends $44 a week on impulse buys, which adds up to over $2,200 a year.

To combat impulse buying, try creating a shopping list before heading to the store and stick to it. Avoid browsing aisles that are unrelated to your needs, and take a moment to consider if you truly need an item before tossing it in your cart.

If you’re shopping online, resist the urge to click on “recommended items” or “add to cart” without careful consideration.

If you’re struggling with sticking to your budget, perhaps there is a deeper reason for your impulse buys. Consider talking to a professional about it.

4. High-end groceries and brand-name

Most Aussie households spend around $160 to $190 a week on groceries. If your bill is significantly higher, it might be time to re-evaluate your shopping habits. 

Look for practical ways to save on groceries or check if the fancy packaging and the promise of superior quality are luring you. Often, you can replace these items with generic or store-brand alternatives, which usually offer comparable quality at a fraction of the price.

5. Entertainment

Australians spend $277 per week on recreation and culture–such as trips, movies, and concerts—totalling over $14,000 annually. This makes entertainment the second highest expense for most households, after rent and dwelling costs.

To cut back on entertainment costs, try exploring free or low-cost activities in your local community. Look for free concerts, festivals, or art exhibits, or visit your local library for books, movies, and other resources. 

6. Personal care 

Pampering yourself is a great way to de-stress and feel good, but those personal care expenses can quickly get out of hand. The average Aussie spends a considerable amount on grooming, shelling out $131 each month on anti-aging products, $75 on hair appointments, and $39 on nail care. That’s almost $3,000 annually.

While taking care of ourselves is important, it’s worth considering if there are areas where you can cut back.

7. Clothing and accessories

While staying fashionable is tempting, the cost of keeping up with the latest trends can quickly drain your wallet. On average, Australians purchase 56 clothing items per year, spending around $101 per week. This translates to over $5,000 annually spent on clothes alone.

Perhaps you can try focusing on building a capsule wardrobe with versatile pieces that you can mix and match. As you do, look for quality items that will last longer rather than succumbing to fast fashion trends.

8. Energy consumption

With the rising cost of electricity, it’s no surprise that our energy bills are taking a bigger bite out of our budgets. As of April 2024, a typical Australian household’s average monthly electricity bill was $165, adding up to $1,979 per year.

While it’s impossible to eliminate your energy usage, there are plenty of ways to reduce it, such as hanging clothes to dry instead of using the dryer or switching to energy-efficient light bulbs.

9. Water usage

The average quarterly water usage sits at $217, which translates to over $800 a year. Of course, water is a basic necessity, but that doesn’t mean we can’t cut back on our consumption, especially when most of us don’t even realise how much water we use daily.

10. High-interest debts

While debt can be a helpful tool, high-interest debts can quickly become a financial burden. The average Australian currently carries a staggering $20,238 in debts spread across consumer loans and credit cards. 

Start by creating a budget and identifying areas where you can cut back on spending to free up more money for debt repayment. Consider consolidating your debts into a lower-interest loan or credit card, or negotiate with your creditors for better terms.

Cost of Living Help with Debt Negotiators  

If you’re struggling to manage your debts on your own, talk to us. We have a wide range of debt solutions for you, such as debt consolidation. You can also get a free debt assessment to start.