Manage Your Money in 2023

Some of us never thought 2022 would end. Perhaps for some, it was 2020 ‘too’. Inflation is on the rise. Petrol and food staples are almost unaffordable and other annual costs such as insurance and council rates are projected to rise next year.

Managing your money well can bring you a sense of security against these backdrops of increasing costs. When you have a good handle on your money, you might not feel so overwhelmed.

According to a study by the Australian Institute of Family Studies*, one in six families are concerned about their families financial situation and one in five are very concerned about their future financial situation. More than three quarters of Australians have been shocked by the cost of everyday expenses like fuel and power bills over the past three months according to Compare the Market’s latest Bill Shock Survey. The main concerns about Australian’s financial future are retirement, loss of employment or work hours and physical and mental health.

The main financial stressors are:

  • Sudden loss of employment
  • Lack of savings
  • Overuse of credit or debit cards
  • Struggle to pay off credit cards
  • Inability to pay for rent or mortgage
  • Struggling to pay bills
  • Unable to pay for repairs and maintenance to house and cards
  • Not able to pay for heating or cooling
  • Going without meals
  • Imminent bankruptcy

Here are some simple tips to help manage your money. Take one step at a time and implement changes so you feel in control of your money.


Bank Accounts

In order to create a savings plan, you first need to understand your expenses so you can plan for them. You can’t learn money management without understanding your income and expenses. Be brutally honest. List all of your debts and include your HECS/HELP debt, car or mortgage repayments and other high expenses that may be hurting your budget.

Setting up separate bank accounts for bills, savings and an emergency fund and creating an automated payment system into each fund will ensure that you’ll always have money set aside to pay for everyday expenses as well as unexpected expenses when they arise.

Pro Tax Tip: Your emergency fund is arguably one of the most important bank accounts you’ll open. Cover 3 to 6 months of your current expenses to plan for unforseen circumstances such as losing your job or paying for natural disasters.

Plan For Tax

You have the right to arrange your financial affairs to keep your tax to a minimum. If you understand how much tax you are obligated to pay you can look for ways to reduce that amount.

Some of the ways to reduce your income tax are:

  • Pre paying deductible expenses such as work subscriptions or education fees
  • Taking advantage of full expensing and depreciating rules if you work for yourself
  • Reviewing and postponing paying invoices until the next financial year
  • Making voluntary concessional superannuation payments
  • Writing off debts
  • Consider investment strategies that include borrowing for rental properties, businesses or shares
  • Restructure your home and investment loans
  • Transfer assets into family trusts or self-manage super funds
  • Salary package for car lease, superannuation, etc
  • Claim all car, travel and work expenses

Pro Tax Tip: You can only claim work expenses. If you have a cost that is part business and part private. You’ll need to apportion the work-related costs only.

Make A Plan

Without having some sort of plan, you might find yourself easily short of money or overspend. When you know and understand what funds are available, it’s easier to not be tempted to make purchases you might not need.

When you create your budget, look at your costs, but also at where you financially want to be in the future. Plan to save for a down payment on your home or save for a holiday rather than paying for it on credit and paying it off with interest.

Pro Tax Tip: If you’re saving for your first home, take advantage of the First Home Super Saver (FHSS) Scheme to sae for your deposit. This scheme allows you to voluntarily contribute up to $30,000 to your super and withdraw this amount (plus earnings, less tax) to buy your first home. Voluntary contributions include before-tax contributions, such as salary sacrifice, and after-tax contributions.

Fringe Benefits and Christmas Parties

Check Your Finances Every Day

Managing your budget is not ‘set and forget’. You can’t make progress unless you know exactly where you stand. Your budget may need to be tweaked to account for changes in your circumstances. Use a spread sheet or app to make quick work for tracking your expenses. Reviewing your budget will get easier until it’s a natural choice you make.

Pro Tax Tip: Look for ways you can cut back expenses if you’re down to the line. Saving $20 a week will reap an annual saving of $1,040.

Simple ideas for cutting expenses include;

  • Planning meals
  • Taking in your lunch to work
  • Cutting a subscription you no longer need
  • Review electricity, gas and insurance providers


Do you understand your net vs gross income? Your real take home pay is your net income (income after taxes). Your net income includes:

  • Income after tax
  • Income after the medicare levy
  • Income after the medicare levy surcharge (if applicable)
  • Money after concessional superannuation payments

Your net income will determine which tax bracket you fall under. Australia has a progressive tax system, which means the more you earn, the higher percentage of your wage you’ll be obligated to pay in tax.

Pro Tax Tip: Claiming all tax deductions will lower your net income and result in a tax refund.


Your debt is a financial burden that affects your current budget as well as your future savings. Some debt is good, such as debt for rental properties and ability to negatively gear the property, but debt such as credit cards will suck you dry for nothing in return.

Plan to reduce or pay off any debt that gives you nothing in return. Write down all of your debts and work out which one to tackle first. Look at your:

  • Current outstanding balance
  • Status of the debt
  • Type of interest rate (fixed or variable)
  • Annual interest rate
  • Minimum monthly payment requirements

When you total the amount of debt you have, it will help motivate you to get rid of it as fast as possible. Understanding these costs will also help you decide which debt reduction strategy will get you out of debt faster.

Know Your Credit Score

A credit score is a prediction of your credit behaviour, such as how likely you are to pay a loan back on time, based on information from your credit reports. Your credit score affects certain lenders and your ability to access better loan terms and lower interest rates. This may save you thousands of dollars when you’re paying off a mortgage or smaller loans.

Factors that are taking into account to work out your credit score include:

  • Bill-paying history
  • Current unpaid debt
  • Number and types of loans
  • How long you’ve had the loans
  • Ability to pay the loans
  • New applications for credit
  • Debt collectors, foreclosure or bankruptcy

Find Your Reason

If budgeting sounds like a chore, find your reason. Make it meaningful. Why do you want to get on top of your money? What’s your financial goal? How are you going to get there and what are you going to put into place to achieve them?

A few common reasons are:

  • getting rid of oppressive debt
  • becoming financially independent
  • Planning for retirement
  • going on a holiday
  • buying houses to set yourself up for passive generated income so you can reduce your work hours or retire completely.

Implement strategies one step at a time to avoid being overwhelmed. You can absolutely manage your finances and your taxes. You just need to start. Make a choice today.

* The Families in Australia Survey is AIFS’ flagship survey series. Its scope is every person in every type of family, with the survey open to Australians aged 18 years and over.