Increasing your income is not the only way to improve your financial situation.

Ever thought winning the lottery would fix all of your money worries?

Perhaps, but there’s plenty of evidence to show that a sudden windfall can sometimes create more problems than it solves. The rule of thumb is, if you don’t have to work for it, you don’t value it.

The reality is that almost 17% of the Australian population lives in households that earn a yearly taxable income of $66,667 or less1. More than 70% of households have some level of debt, with 26% of them incurring a total debt three or more times their annualised disposable income2. And one-third of Australians over the age of 60 are living below the poverty line3.

So how can low-income households help themselves without increasing their income? By following the two key principles of managing any budget: save more, spend better.

Fatten the piggy bank

As most of our advisers will tell you, true financial stability is not so much about how much disposable income you have but about how much you have saved. This increases your ability to pay unexpected bills.

Recent studies have shown that Australians have been saving much more since the global financial crisis, but many are still far from the recommended three months’ worth of your salary stashed away for an emergency fund.

Plan ahead and budget

The first rule of smarter savings? Planning.

Whether you’re saving for a specific item or just looking to manage your finances, it’s worth sitting down and calculating how much you have, how much you need, and how much you want. This can be done by visualising your end goal, setting a clear time frame and defining achievable milestones.

It may be useful, for instance, to split your money into three pots: a pay pot to pay current and future bills, a save pot that puts a little towards your goals, and another for leftover money that’s safe to spend.

Managing these is much easier if transfers and deposits are automated, that way you’ll have less chance of spending on a whim.

It’s never too late to start saving, especially if you use a savings plan calculator to help you get started.  

Keep an eye on expenses

Once your savings are on track, a budget calculator can help you monitor expenses. This is a tool best used alongside the following habits.

Check your bank statements

Check your income is right. This may include your salary, Centrelink payments, child support payments, and if any is missing or incorrect, challenge it with your boss or contact Centrelink. Also look at what you’ve spent by going over the ‘debits’ column of the statement and compare these debits with your receipts to make sure they’re right.

Reduce your spending

Stay on top of your budget by cutting costs wherever possible. Turn off lights, eat at home and do your own household repairs if you can.

Consolidate your debt

Prioritise debt payments to get rid of the highest interest rates faster. You can also take advantage of balance transfer offers.

Compare before you buy

An informed shopper is a smart shopper. Insurance, health care and even utility providers offer special tariffs to accommodate all budgets. You may also be eligible for low-interest loans or special bank accounts with little to no extra fees.

Maximise your entitlements

Find out if you qualify for any government financial support schemes. From housing and health care to utilities and tax deductions, there are many types of government support for low-income households.

You can count on us

We can help you stay on top of your bills, achieve your savings goals, and spend your money wisely.

My AMP gives you fast, easy and secure online access to your banking, super, insurance and investment accounts all in one place. You have the ability to connect with non-AMP accounts, and view your external balances, giving you a clear picture of your financial situation.

Bett3r is a smart bank account that can help manage your budget and stay on top of your finances. Once set up, money is automatically set aside to pay your current and future bulls, it can put a little towards your savings goals and lets you know what’s safe to spend.


Australian Taxation Office (ATO), Low income earners, consulted in August 2016
Australian Bureau of Statistics (ABS), Household Income and Wealth 2013-2014, consulted in August 2016
Global AgeWatch Index