5 ways to make your spending count

It’s a no-brainer that COVID has changed the way we live. Handshakes are out, elbow bumps are in, and the humble roll of toilet paper has become a prized household collectable.

But one of the biggest turnarounds is the way we’re managing our money. Australians are tucking away savings at a rate not seen since the 1970s.

Concerns over COVID, coupled with the restrictions of lockdowns, have seen our household savings rate (that’s how much income we save) skyrocket from 6% to 19%. To put that figure in dollar terms, the value of deposits sitting in savings accounts ballooned out from $80 billion at the start of 2020, to be worth close to $160 billion by the end of the year.

That’s a lot of spare cash stashed away. And we’re feeling better for it.

Financial comfort hits record high

ME’s latest Household Financial Comfort Report shows a big uptick in our comfort levels around personal savings and our ability to handle an emergency. In fact, household financial comfort is at an all-time high according to the report, which goes to show the power of personal savings.

The trouble is, while saving is good, some level of spending is necessary to fuel the economy. And our current high level of savings could hinder an economic recovery.

We can’t stop spending, but how we spend can support Aussie businesses and get the economy back on track. The trick is to spend smart so that you benefit just as much as the economy.

Here are five ideas to make your spending count.

1. Invest in you

Boosting your skills can be a great way to forge ahead in your career. Think about taking a class, enrolling in a course, and getting the skills and qualifications you need to put yourself in the running for a pay rise – or maybe a promotion.

For fast results, TAFE colleges offer short courses that can see you upskilled in just days or weeks. It could be a great investment in your income-earning potential.

2. Spend today, avoid a bigger bill later on

A little maintenance spending today could see you save on a far bigger expense later on. Book your car in for a service to keep it running smoothly (and economically). Or call in the tradies to fix up any minor issues around your home, and avoid a budget-busting emergency further down the track.

Personal maintenance matters too. A trip to the dentist can prevent a minor cavity becoming tomorrow’s root canal candidate.

3. Give your home a makeover

A home makeover can be as simple as repainting the exterior, or it can be an all-in job like replacing an outdated kitchen. No matter how big or small your project, the best part of renovating is that it can improve your lifestyle – and your home’s value. Good for you, great for your biggest asset.

4. Show local businesses some love

Neighbourhood businesses are often small businesses that really feel the pinch of tough times, and right now they need your support.

Maybe book a haircut at the local salon. Dine out at your town’s cafes and restaurants, and take a browse through local stores – you could find some hidden gems, and your spending will help support your community.

5. Head off on holiday

It’s been a tough 12 months, and we all deserve a break. Taking a holiday lets you rest, recharge and avoid burnout. It will also support tourism, one of the industries hardest hit by COVID.

A holiday doesn’t have to be elaborate to benefit you as well as the economy. A simple weekend away can nourish your mental wellbeing, with the added feelgood factor of knowing you’re helping tourism operators.

Dipping into savings doesn’t have to mean compromising your war chest or your financial wellbeing. Go ahead, enjoy some smart, guilt-free spending. It's for the good of your country.