The 2025 Australian Guide to Managing Your Money and Household Expenses

Key Takeaways

• Use budgeting tools and sinking funds to manage rising living costs and stay ahead of bills.

• Build an emergency fund and repay debt using structured methods like snowball or avalanche.

• Optimise digital banking apps and cost-saving strategies to track spending and meet financial goals.

^{Disclaimer: This content does not constitute financial advice. The article below is for the readers’ information and education only. The writers at Friendly Finance are not financial advisors and are therefore not authorised to offer financial advice. Friendly Finance recommends our readers always do their research and seek independent advice as needed.}

Managing money isn’t just about cutting back—it’s about creating a financial system that actually works for your lifestyle. In 2025, with rising cost of living, digital-first banking, and more ways to spend than ever, it’s easy to feel overwhelmed. But building a solid financial foundation doesn’t require perfection—it requires intention.

This guide is here to help you get clear on where your money’s going, make smarter choices with it, and set up systems that keep you in control—whether you’re budgeting on a tight income, saving for something big, or just trying to stay ahead of the next bill.

Managing Your Money

Track Your Spending and Classify Wants vs Needs

Start by reviewing three months of transactions—use tools like Frollo to automatically classify expenses like groceries, bills, and discretionary spending. Recognise patterns in eating out, streaming subscriptions, or impulse shopping. Use this clarity to trim non-essential spending.

Learn How to Budget

Use the 50-30-20 rule: 50% towards necessities, 30% for lifestyle, and 20% for savings or debt payoff. Use the Moneysmart budget planner or apps like Frollo to automate and visualise your plan.

⭐Related Resource: Money Management Apps You Can Use

The Money Hacks Challenge

Pick two non-essential expenses (e.g., coffee outs or subscriptions), pause them for 30 days, and transfer the saved money to your savings. This builds a positive financial habit reinforced over time.

Start an Emergency Fund

Even a small buffer offers protection: begin with $500 and aim for 3 to 6 months of expenses. Keep it in a high-rate savings account for easy access but out of sight to avoid temptation. Don’t underestimate its power to shield you from unexpected shocks.

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Boost Your Income with a Side Hustle In addition to managing your spending, you can accelerate your financial goals by earning extra cash. There are many flexible options that can fit around your full-time job. Consider exploring ways to make additional earnings through activities such as:

• Completing Online Tasks: Earn money by taking surveys, playing games, or watching videos on platforms like Swagbucks.

• Selling Unused Items: Declutter your home and make cash by selling pre-loved goods on Facebook Marketplace or Gumtree.

• Freelancing Your Skills: Offer your professional skills in writing, graphic design, or administration on sites like Fiverr and Upwork.

• Joining the Gig Economy: Earn money on a flexible schedule by becoming a delivery driver for services like Uber Eats or DoorDash.

You can check out our full article here: Beer Money! Top 8 Ways to Make Money Online in Australia

Tackle Existing Debt

If you have existing debt, creating a clear repayment plan is crucial. Two popular methods are:

• The Debt Snowball: Focus on paying off your smallest debts first, regardless of the interest rate. The quick wins can create powerful momentum and motivation to keep going.

• The Debt Avalanche: Prioritise paying off debts with the highest interest rates first. This method saves you the most money in interest over time, though it may feel slower at the start.

⭐Related Resource: Debt Consolidation: How to Best Consolidate Debt and the Types of Loans To Do It

Spending Your Money

Understand How Credit Cards Work

Credit cards offer benefits, but revolving debt is costly. Always aim to clear the balance each month to avoid interest and fees. Consistently paying on time also helps build a positive credit history, which is important for securing future loans like a mortgage.

Understand BNPL Services

Buy Now, Pay Later (BNPL) is convenient, but if not paid off within the interest-free period, fees and negative budget impact can accumulate. Use BNPL sparingly, and treat it like a mini loan factored into your budget.

Banking Tools & Apps

Digital-First and Open Banking

Apps like Frollo and Up let you see all bank and credit card accounts in one place, allowing transaction categorisation, goal tracking, and notifications. These tools use Open Banking (CDR) to provide secure, read-only access.

Features to Watch for

Seek apps with round-up savings, bill reminders, spending limits, and goal-tracking features. These support mobile banking app efficiency and help you stay on top of your financial goals.

Managing Cost-of-Living Pressures

Monitor Inflation & Price Changes: Track the Consumer Price Index (CPI) and adapt your budget when core costs—like food and energy prices—rise.

Reduce Big Bills: Use Moneysmart tips to smooth out expenses like energy or council rates, and compare providers each year. Don't forget to check for any government rebates or concessions you may be eligible for on sites like Services Australia. Ask your bank for mortgage rate comparisons or consider refinancing if possible.

Master Your Grocery Bill: Groceries are a major expense, but you can reduce the cost with smart habits. Try meal planning for the week, shopping with a list, comparing unit prices to find the best value, and buying fresh produce when it's in season.

Save on Transport: Use public transportation, loaded onto Myki or Opal cards, for daily commuting to reduce fuel costs. Plan routes to tap into daily caps.

Planning for Financial Goals

Create Sinking Funds

Divide big expenses—holiday, car maintenance, insurance—into manageable monthly savings tracked in separate savings accounts. This avoids budget disruption and builds momentum.

Review Your Superannuation

Your super is a key part of your financial future. Make it a habit to:

• Check your statements at least twice a year to track performance and fees.

• Consider consolidating multiple super accounts to avoid paying duplicate sets of fees.

• Explore making voluntary contributions to boost your retirement savings if your budget allows.

Protect Your Financial Future with Insurance

A solid financial plan includes protection against the unexpected. Review your personal insurances, such as Life Insurance, Total and Permanent Disability (TPD), and Income Protection. These are often held within your superannuation, so check your statement to see what you are covered for.

Build an Investment Foundation

Once your emergency fund is secure, consider low-cost tools like ETFs or mutual funds. Use portfolio trackers to monitor performance and rebalance before RBA adjustments.

Resources to Support You

• Moneysmart: calculators, budgeting toolkits, and easy tips

• Mozo, Canstar, and Compare the Market: compare savings accounts, interest rates, energy, insurance, and banking apps

• Financial counsellors: free support via the National Debt Helpline for those facing financial hardship

Managing household finances in 2025 isn’t just about cutting costs—it’s about making deliberate, ongoing financial decisions. Automate savings, trim regular bills, and deploy smart tools like budgeting and banking apps. With a thoughtful plan, digital support, and disciplined spending, you can stay in control.