Savings and budgeting tips: How to avoid living paycheck to paycheck

With the rising cost of living and interest hikes squeezing more Aussies than ever, it's no wonder that some are struggling to make it from paycheck to paycheck. 

According to data from earned wage access provider Paytime at the end of last year, a little over half of Australians who were paid on a fortnightly basis say they’re struggling to pay their bills between paychecks.  

So, the question is then, what can you do to avoid getting caught out?

Set some money saving goals

One way you can start to move away from paycheck to paycheck living is by setting money saving goals. This can be as basic as a certain percentage of your regular income or a specific amount of money that you need for a holiday or home deposit.

If you’re saving a certain portion of your income every payday, one suggestion would be the 50/30/20 method. Basically, 50% of your income goes to your needs, 30% goes towards wants, and 20% is saved. However, this might not be realistic if you’re new to saving—so, it’s important to keep in mind that even a small amount of money saved (such as 5%) is worth it.

Review your spending habits

Another way you can save money, especially if you have a lot to spend on your needs, is by cutting out discretionary spending. This could be something as simple as pausing your subscriptions for the month or having a sober month.

By reviewing your spending habits, you’ll also be able to take a good look and decide what you actually want to spend your money on. Then, from there, you can make a budget.

Make up a money budget

Budgeting is one of the best ways you can plan out your income and expenses. Budgets can also be a really good way of finding out what you might be spending way too much on. For instance, you might be spending too much on eating out, which would lead you to think about more cost-sustainable ways of eating.

Reduce any debt that you might have

Having a lot of debt can weigh on your budget, acting as a leaky pipe that haemorrhages cash away from you. By making extra repayments, you reduce the length of your loan which can get you to a debt-free life faster. 

Another way, if you have lots of different debts, is by consolidating these debts. By consolidating your debts, you can give yourself a singular repayment that could be at a better interest rate than your other debts. 

Use a high-interest savings account or term deposit

Once you’ve begun saving, you’re probably wondering where to keep it. In general, you want to see your money not just sit around but actually grow over time with compound interest. One of the best ways to do this is with a high-interest savings account. 

With the recent rate rises by the RBA, there’s been a fair amount of savings account providers hiking their rates as high and even higher than 5%. Alternatively, if you wanted to lock your cash away in a term deposit, there are some accounts with some good interest rates—and the benefit? It’s a fixed interest rate for the length of the term.

Not sure what savings account you want? At Mozo, we have comparisons on dozens of high-interest savings accounts so you can compare and get the account that works best for you.

Savings account comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 274 savings accounts.
Last updated 14 July 2024 Important disclosures
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first 4 months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.

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    Details
  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

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    Details
  • Bonus Saver Account

    5.00% p.a. (for $0 to $250,000)

    0.05% p.a.(for $0 and over)

    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.

    Start saving and earn interest with just a $20 deposit and make 5 eligible transactions each month. No fees or penalties for withdrawing money.

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    Details
  • Savings+Bonus

    5.00% p.a. (for $0 to $250,000)

    2.00% p.a.(for $0 to $250,000)

    Yes up to $250,000

    Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.

    Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.

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  • Life - 18-29 years old

    5.20% p.a. (for $0 to $30,000)

    2.00% p.a.(for $0 and over)

    Yes up to $250,000

    Make 5 eligible card purchases per month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.

    Are you 18 - 29 years of age? Earn up to a generous variable interest rate on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30,000.

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  • Mozo Expert Choice Badge
    Savings Maximiser

    5.50% p.a. (for $0 to $100,000)

    0.55% p.a.(for $0 and over)

    Yes up to $250,000

    For customers who have an Orange Everyday account, deposit $1000 into a personal ING account, make 5 eligible transactions and grow their nominated Savings Maximiser account each month.

    Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^

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    Details
  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.

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^See information about the Mozo Experts Choice Savings Account Awards

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