Cash Flow and Budgeting Strategies

What are the 3 biggest living expenses for households?

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We check out the three largest contributors to household spending in Australia and where people would source additional cash if living expenses rose.

If you worked a full-time job in Australia in 1975, the average amount you would’ve earned a year was about $7,600, whereas today, that figure would be closer to $72,000, according to research by McCrindle.

That’s welcome news, but while we’re earning more than what we did in 1975, things are also costing us more.  A loaf of bread is 10 times the price, a litre of milk is three times the price, a newspaper is 20 times the price, not to mention petrol has doubled, with house prices in some capital cities up thirtyfold.

Housing, food and transport

The three largest contributors to household spending in Australia have been the same for many years, according to the Australian Bureau of Statistics (ABS).

ABS figures reveal three-and-a-half decades ago the largest contributors to household spending were food (20%), transport (16%) and housing (13%), with housing now at the top of that list (20%), followed by food (17%) and transport (15%) respectively.

A separate report by Deloitte highlighted that around 37% of Aussies were concerned about their ability to cover expenses, with more than 50% indicating that they expected to pay even more on housing and energy costs going forward.

What people would do if costs rose further

When asked, if your day-to-day living expenses increased, where do you think you’d source additional money from, here was the top eight responses in a survey of Australians:

Reduce luxury spending – 20%

Buy fewer groceries – 12%

Spend less on transport – 12%

Borrow money via a loan or credit card – 10%

Draw on savings – 5%

Spend less on food delivery and eating out – 5%

Cancel subscription services – 4%

Cancel streaming services – 3%.

Source: AMP News & Insights October 2018

Minimal vs FOMO: what are young people really up to with their money?

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The spending habits of our younger generation show that experiences mean more to them than buying stuff.  So are they better at managing money than their Boomer or Gen X parents?  Or is FOMO leading them into the dangers of growing debt?

For some years, retail businesses have been in a tailspin about the rise of the experience economy.  Instead of going on shopping sprees, people are channelling more of their cash into dining out, weekends away and holidays.  In 2015, JPMorgan collated data from credit card spending by millennials (those born between 1981 and 1997) and non-millennials (born before 1981).  They found 34% of spending by millennials was on travel, entertainment and dining, compared with 28% for non-millennials.

With less emphasis on buying stuff, this could be seen as a welcome minimal movement among millennials.  However, with the rise of social media, sharing photos from our latest experience, rather than parading with a new purchase, has become the preferred way of keeping up with the Joneses.

The dangers of FOMO

So the pressure to buy, is being replaced by the need to be there, or what’s become known as FOMO, ‘fear of missing out.’  And according to a recent survey by Credit Karma, it’s a fear that’s fuelling financial problems among young people, with nearly 40% of them going into debt to join in on the latest experience with their peers.  And two-thirds of millennials surveyed said they regret spending more in social situations than they had originally budgeted for.

If you’re in danger of messing up with money thanks to this pressure to be involved, here are some tips to help you enjoy a fulfilling life without regret:

Automate your cash flow

Automating your cash flow is one of the key ways you can stick to a budget.  Budgets are much harder to stick to when all your spending comes from the same pot of money.  By directing income into separate key accounts you can ensure you’re taking care of everyday expenses and savings with enough left over to pay for the extras without getting into debt.

Find ways to stick to it

If you’re finding that keeping up with your friends’ social agenda is making it hard to keep to your budget, maybe it’s time to start taking the lead with making plans.  Coming up with your own ideas for how to enjoy your weekend without spending big or celebrating on a shoestring could help you and your friends get better at living within your means.

Call on the crowd

If reading up about money, budgeting and saving sounds like a boring waste of time, think again.  The blogging world has blown up with money advice for, and by, young people that’s entertaining and relevant.  Browse some of the best money blogs for 20-somethings and start learning how others are enjoying life to the full and still making the most of their cash.

Break through the taboo

There’s no need to limit yourself to getting advice from the blogosphere.  If you’re struggling to make ends meet and join in with every social experience that comes your way, chances are your friends are too.  Maybe it’s time to break with the tradition of money being a taboo topic and get real with your friends about finances.

Source: Money & Life. 23rd July 2018

Budgeting apps

7 budgeting apps to help you save

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Where does all that money go?  A host of apps are available to help you easily answer that question and even budget better, so you don’t get caught short in the event of a ‘rainy day’ and can feel more comfortable and in control of your finances every day.

We’ve found these seven apps to help you get off to a great financial start.


This free app allows you to track your personal expenses on the go and is very simple to use.  Made available by the Australian Securities and Investments Commission’s MoneySmart website (, it will give you a better picture of what you are spending your money on.

You can use it to record expenses such as your weekly household budget, work or travel expenses, particularly those cash expenses that are difficult to record or the costs of a special event, such as a wedding.

You can also separate your spending into categories like “needs” and “wants” to identify areas where you can rein in your spending and start saving.


Also available from the MoneySmart website (, this free and easy-to-use app will help you set realistic savings goals and help you to prioritise them, making it easier to achieve them and providing you with positive encouragement by tracking your progress.

You can also use this app to track how well you are saving for a holiday, wedding, car, house, renovation, school fees or anything else you are dreaming of.


Also free, this popular budgeting app integrates with many of the major Australian banks.  This means you don’t have to manually enter all your expenses onto the app.  Instead, you sync the app with your bank accounts and credit cards to track where your money is going.

You can use mobile photos and geo-location to input cash transactions like coffee or a beer, or add additional details like photo receipts, bills and invoices to help you track your transactions.

Pocketbook automatically organises your spending into categories like clothes, groceries and fuel, showing you where money is being spent.

You can also set up budgets for each category, see your balances and view your transactions.  The app ensures all your bills are automatically detected and in the one place.  Plus, you get notified when bill payments are coming up and if you have enough money to cover them.


Another free app, Mint brings your bank accounts, credit cards, bills and investments together so you instantly know where you stand.  You can see what you’re spending, where you can save money and can even keep track of your credit score.  Plus, it allows you to easily create budgets you can stick to.

You get bill reminders so that you pay bills on time.  And, you can schedule payments on the spot or for later, ensuring you never miss a payment again.


This app helps you to save and invest proactively, by using your digital loose change.

You simply connect it to your credit card, debit card or another funding source and allow it to round up each of your transactions to the nearest dollar.  It will then invest the change into a pre-decided diversified portfolio of investments that takes into account your investment goals and your risk tolerance.  The transactions are small so hopefully you won’t even notice them.

This app is free to download.  Once an account is opened, there are no fees on $0 balances.  After that Acorns charges $1.25 per month for accounts with a balance under $5,000 and 0.275% a year (charged monthly, computed daily) for accounts with a balance of $5,000 and over.


This app is great for people with work expenses.  Not only does it help you track and log all your work expenses, it also liaises with your office while you are away.

Expensify automates every step of the expense management process.  Its technology will read and scan your receipts and then add these to an expense claim that can be automatically submitted to your employer and approved.  You could very well get your expenses reimbursed in just a few minutes.

A very basic service is offered to individuals for free.  All the bells and whistles are available for US$9 a month on a corporate plan.


This app is a modern take on the time-tested envelope budgeting method, where the cash for each month’s expenses is taken out and divided into envelopes for each budget category – for example, groceries, transport, eating out or rent.

The idea is to stop spending on that category once you’ve emptied the envelope or before, if you’re really disciplined.

Goodbudget helps you to stick to your budget limits.  Rather than discovering that you overspent when it’s too late, you can plan your spending beforehand and only spend what you have.

Because you can share a budget across multiple devices, the app can also help couples manage the combined household budget and check know how each partner is tracking.

There’s a free version that allows you to create 20 envelopes and share across two devices.  However, for US$6/month or US$50/year you get unlimited envelopes and accounts, the ability to share these across five devices and to keep five years of history.

Source: Money and Life.


13 ways to save money this spring

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Saving money is a good thing no matter what time of year it is, but if you’re yet to implement an approach that works, here are some ideas to kick off a new season.

Leave your credit card at home

It might sound like an obvious one, but taking out cash rather than a credit card can keep you from over spending, as when the money is gone, it’s gone.

Credit cards are also typically more expensive than other forms of borrowing. Plus, when you don’t pay your balance in full, interest is payable and that includes when you pay the minimum owing.

Honour thy shopping list

Writing a shopping list based on what’s at home and what you plan to cook during the week means you can avoid buying more than what you need and purchasing items you can probably go without.

With food wastage leaving the average household out of pocket by anywhere from $1,036 to over $3,500 every year, it’s worth some thought.

Take public transport

Uber rides may be cheaper than the common taxi fare, but if you really want to cut down on your transport bill, public transport is often a great option.

In fact, estimates show that catching public transport may be up to four times cheaper than travelling by car, and it reduces the cost of buying, maintaining and running your own vehicle.

Call your providers’ competitors

Research shows a typical household could save over $1,000 on their electricity bill every year just by switching to a provider with a cheaper energy plan.

Now apply that thinking to your mobile, internet, gas, car and credit card as well, and you realise the potential savings you could make annually, simply by shopping around.

Roll your debts into one

If all the small debts you once had, have multiplied and grown into bigger debts – you’ll be pleased to know it is possible to roll them into a single loan, and reduce what you pay in fees and interest.

If you owe a lot, it could mean thousands of dollars in savings over the longer term.

Sell your unwanted stuff online

According to the annual Second Hand Economy Report, commissioned by Gumtree, 89% of Australians have around $5,000 worth of unwanted goods just lying around the home.

The most common unused items listed on the report were clothes, shoes, and accessories (61%), books (53%), music, DVDs and CDs (51%), games and toys (49%).

Change your light bulbs

It’s not a myth—energy-efficient light bulbs use about 25% to 80% less energy than traditional incandescent light bulbs and generally last three to 25 times longer.

Not only that, energy efficient appliances across the board—fridges, washing machines, microwaves and air conditioners—can literally save households hundreds of dollars a year in running costs, with such appliances accounting for up to 33% of people’s home energy use.

Know where your super’s at

More than $14 billion was sitting in over 5.7 million lost and unclaimed super accounts across the country as at 30 June 2016, so if you don’t know where yours is sitting, it’s worth investigating and we can even do the legwork for you.

Take your own food and drinks

If you’ve been to the cinema or a football game recently, you’ll probably agree that this is a sure way to reduce what you fork out on snacks and beverages.

Similarly, making your own coffee, buying a reusable drink bottle and taking lunch from home each day can make a huge difference to what you spend when you’re at work.

Cut down on the sneaky spending habits

If you wore a new outfit Saturday that you insisted your mum bought you ages ago, you’re not alone – Aussies fork out nearly $3,000 a year on purchases they hide from their other half.

Topping the list for hidden purchases are clothing, followed by gambling, junk food and cigarettes.

Go where the happy hour’s at

If you like to go out and don’t see that changing anytime soon, the good news is there are plenty of places where you can find two-for-one offers and other cheap deals.

Apps like TheHappiestHour can give you ideas, with 4,000 specials listed from around Australia and New Zealand. And, you may even find some new venues you haven’t tried along the way.

Get your hair done at a fraction of the price

If you haven’t added up what you spend on your hair each year, before you do the maths and freak out, the good news is there are student colleges and salons that charge a fraction of the normal price if you’re happy to model for an apprentice who’s completing their training.

Forget about the Joneses

The pressure to stay up-to-date with your neighbours, peers and even celebrity icons can be a subconscious motivation behind many poor financial decisions.

Try to keep in mind the old adage—too often we buy things we don’t need with money we don’t have to impress people we don’t like.

At Revolution Financial Advisers, we can assist you to analyse your cashflow and budget to allow you to manage your expenses so that you can make real savings and stop spending money unnecessarily.

Source: AMP

Receiving a tax refund

Receiving a tax refund, bonus or inheritance

By | Cash Flow and Budgeting Strategies, Wealth Creation and Accumulation | No Comments

If you get a windfall such as a tax refund, a bonus, or an inheritance, you might be tempted to splurge on things you don’t need.

Here are some smart ways to spend this money that will give you long-term benefits.

  1. Pay off your debts

You could use this money to pay off your credit card debt or pay down your mortgage or personal loan. Try to focus paying off debt with the highest interest rate first.  Paying off debts means you’ll pay less interest and save money. This will allow you to use the money you would have used to pay these debts to build and accumulate wealth instead.

  1. Put in high interest savings account

To alleviate the desire to make a rash purchase or decision, place the money in a high interest savings account until you have decided what you really want to achieve from your windfall. Your money will grow with the power of compound interest. For example, if you put a $3,000 tax refund into a high interest savings account that earns 5% interest, in 5 years’ time you’ll have $3,850.

  1. Contribute extra to your super

Making extra contributions to your super can really boost the amount of money you have to retire with. The catch is you won’t be able to spend it until you retire but with favourable tax rates inside of super it may suit your current circumstances.

  1. Consider investing your windfall

Investing your windfall can help you grow your money and make it work for you. If you choose to invest, make sure you take the time to consider your investment goals.

Make an appointment with us to discuss any of the above but especially if you would like to receive solid strategic advice on large amounts of money, such as an inheritance or a redundancy payment.

Financial Year Strategies for 2016/17

Smart end of Financial Year Strategies 2016/17

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With the end of the financial year approaching, it’s a great time to make smart decisions about your finances. Taking action before 30 June can open up more opportunities for you.

At Revolution Financial Advisers we know that there isn’t a one-size-fits-all solution to wealth management, so we’ve outlined 12 tax-effective strategies that you could benefit from. We can help you find what strategies are right for you, so you can benefit now and also save your retirement.

Download the Strategy Guide here

Get help with your Budgeting.

Ever Wonder Where Your Money Goes?

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It doesn’t matter how much money you have or make, sometimes it just doesn’t feel like it is enough. When you create and stick to a budget, at least you know how much you actually have and what you can do to make the best of it.

Budgeting shows you where you are financially and helps you map out a path to where you want to be. By creating a budget and setting aside a few minutes a week to keep track of your money, you will be able to:

  • make informed decisions about what to do with your money
  • figure out what changes you should make in your spending habits
  • start getting into good saving habits

Step 1 – track what is coming in and out

The first thing to do is figure out what money you have and where it goes. Try to keep a diary of your expenses and your spending for a couple months. This will enable you to calculate where your money is and how much spare cash you have after everything is paid.
Your payslip is a great place when looking for the money you make. Be sure to check out any other sources of income, such as Centrelink benefits, rental income or money from relatives. Your income could be periodical or come in chunks, so it might be easiest to average your monthly income.
Make a list of all the regular expenses you have such as credit card bills, rent or mortgage payments, and grocery bills. Don’t forget items that pop up unexpectedly such as holidays, birthdays or insurance premiums.

Step 2 – manage your budget

Regardless of whether your budget is in the red or in the black there are things you can do to be thriftier. Some easy ways to reduce your spending are:

  • Find small, non-essential items you can cut back on. What can you do without?
  • Are there any direct debit payments which are being paid without you actually using the service? This could be an old internet provider or a gym you don’t go to any more.
  • Check out your interest rates. Is there any benefit to consolidating? Can you shop around for a better deal?
  • Can you get a better deal on your services? Sometimes switching your phone, mobile, gas or electricity can provide you substantial savings, it helps to look at all your options.
  • Can you pay more than the minimum on your debts? Whether it’s personal loans or credit cards, paying the minimum will hardly make a dent as you will only be paying off the interest.

If you’re having difficulties repaying your debt, speak to your lender. Whatever happens, don’t ignore the problems. By being open and honest about your financial difficulties with your lender, you will probably find they are open to review your repayments and look at other solutions to help you out.

Step 3 – make goals and stick to them

It is time to get your money to work for you by making financial goals:

  • Short term goals – make them achievable in a realistic timeframe. They could be as simple as paying off your credit card or saving up for a family holiday. Make sure you reward yourself when you have achieved them.
  • Long term goals – these can be harder to achieve as they seem so far away, but look at goals such as saving for a deposit, paying off your mortgage quicker or saving for your retirement.
  • Expect the unexpected – it is a good idea to put some money aside for emergencies or unexpected events. You could aim to save enough to cover the cost of replacing an expensive household item, but a lot of people aim to have three months’ pay saved up.

Once your goals are made, stick to them. But don’t beat yourself up if you slip up for a month or two; simply
reassess your goals and get back to them.

Step 4 – speak to a professional

At Revolution Financial Advisers, we are here to help. If you feel that you are in over your head and or just want to get a step up with your finances, speaking with us can help you create a financial strategy that will help you achieve your financial goals.