This is the time of year when people start to see that their noble intentions - the ones about turning over a new leaf in 2003 and actually saving some money - are going to be a lot more difficult to achieve than it first appeared.
As much as we try, there is always that one unexpected expenditure, followed next week by another, and another.
To help break the cycle, Money Manager has asked financial planners how to help tighten the belt - without it really hurting.
Harold Bodinnar, of Bodinnar's Personal Financial Planners and author of Wake Up To Wealth, is pretty much a "glass half full" type of guy. He says the best way to cut spending and start saving is to begin before you get paid.
Set up an investment account, he says, and put in 10 per cent of your gross wage each week - or better still, 15 per cent.
"If you put this money aside straightaway and then do your budget, you are ahead from the start," he says.
All that's left is to find ways to maintain as much of your lifestyle as you can.
Here are some tips from the experts.
1- Know thyself
"Prepare a budget, and if you are not earning as much as you are spending, then you know you have a problem," says Gwen Fletcher, of Fletcher Green Financial services, a member of the Lowell Flinders Group.
It may seem a motherhood statement, but many people simply don't have a weekly budget and, says Ms Fletcher, you can't reduce your spending if you don't know where your money is going.
She suggests that before you make a budget, you'll find it helpful to record all your expenditure for a week. Most banks and credit unions will give you a free budget planner or simply get one from the internet.
Use the planner to realistically work out your income and expenditure. Don't lie to yourself - you'll just be setting yourself up for failure.
Use the budget to find where savings can be achieved.
2 - Update the mortgage
With interest rates so low, now is a good time to look at your home loan. Ask your lender about any deals on offer and compare the rate with other lenders and brokers. Money Manager publishes tables each week that can help you compare home-loan rates.
If you decide to switch lenders, make sure you have factored in any fees for transfer and early repayment.
If you are happy with your interest rate, there are other ways to reduce the repayments. For example, paying the mortgage weekly instead of fortnightly can save thousands.
But be wary, says Ms Fletcher - trying to pay off home loans as quickly as possible can be a debt trap for many home owners.
"A lot of people will do better by paying the mortgage off over a longer time," she says.
Using credit cards to meet repayments on fast-track mortgages can result in some borrowers falling further into debt, she adds.
3 Burning down the house
Check your insurance. As victims of this summer's bushfires are finding out, it doesn't pay to have the wrong cover. Once you determine what level of cover best suits your needs, shop around for the best deal. Many insurers will give discounts if you use them for all your insurance needs: house, contents and car insurance. Also, they may offer a discount if you pay in full rather than by instalments.
4 - A spring clean
Ever thought of how our grandmothers managed to keep their houses clean before supermarket aisles were filled with every fragrance of cleanser imaginable?
Do you really need a ti-tree scented, industrial strength, sea-blue designer toilet cleaner? Why not do what Gran did and use a cup of white vinegar, leave it for a while and then brush.
Good, cheap, reliable white vinegar is a wonderful cleaner and can be used to mop the floors, polish the mirror and clean the windows - at minimal cost.
Bi-carb of soda is also useful for removing stains and unwanted smells in shoes and fridges.
5 - Find a good financial adviser
You can't beat a good independent financial adviser to help you through the money maze, reduce costs and find competitive products.
An adviser can also help you devise a financial strategy. However, finding one who is independent and trustworthy may not be easy. Ask a friend, family member or work colleague for a recommendation, and whomever you choose, make sure they are licensed by the Australian Securities and Investments Commission and are members of the Financial Planning Association.
6 - Always haggle
Whether it is a car, carpet or clothes, there is no such thing as a fixed price. Retailers often have large profit margins built into their prices, and if it's a choice between accepting 95 per cent of the price tag or nothing at all, they usually accept the discount.
There is no point being shy, it's your money. You can start by simply asking "Is that your final price?", which opens the bargaining process, or ask if they give discounts for cash.
7 - Credit cards and the rule of 72
Financial advisers will always tell you to pay more than the minimum due on your plastic and to look around for better deals on interest rates. According to Mr Bodinnar, here's why.
While Pythagoras may be a dirty word for many who remember using his theories at school, his rule of 72 is essential if you want to tighten your belt, Mr Bodinnar says.
Divide 72 by the percentage rate you are paying on your debt, or earning on your investment. For example, you bought a $1000 coat on your credit card, with an interest rate of 16 per cent. Divide 72 by 16 to get 4.5. That makes 4.5 the number of years it would take for your debt to double if you did not make any payments.
8 - Up in smoke
Money Manager would never tell you to give up smoking simply because it will kill you. But ask yourself this: would you roll up a $10 note every day and burn it?
Mr Bodinnar suggests smokers try this back-of-the-envelope calculation. Say you smoke 20 cigarettes a day at $10 a pack. Multiply that by seven days, then by 52 weeks and again by your life expectancy.
A 30-year-old expecting to live until the age of 78 will burn almost $175,000 before he dies. Enough said.
9 - Utilising utilities
Deregulation of utilities such as gas and electricity has brought relief to many household budgets. But are people making the most of it, Ms Fletcher wonders. She says households should shop around rather than staying with their long-time utility provider.
Deregulation has brought competition, she says, which means lower costs to you. Phone around for the best quote or use the internet.
Also, use your power wisely. We all know about turning off lights in the house, but what about washing your clothes at night when the cost of electricity is cheaper.
10 - Making a bundle of it
You've seen the ads - Virgin, Optus, Vodafone, Telstra, Primus promising the cheapest deals. Now do the maths.
The cost of phone calls, particularly from a mobile, are highly competitive.
Still, a pay-as-you-go mobile may work out a lot cheaper than being tied into a minimum-call contract for a couple of years. Ask yourself how many calls from the mobile you actually make and if buying the phone outright and using a recharge card may be the cheaper option.
Choosing a lower monthly fee plan can also be false economy. If you use your mobile a lot, you may be much better off on a higher monthly plan with a better per-minute rate.
Also, providers such as Optus allow you to "roll over" unused calls from one month to the next if you are on a plan.
Optus, Telstra and Primus also offer discounts for bundling, running all your phone and internet through one provider. Optus was the first to offer this discount - now up to 16 per cent - four years ago, and about 80 per cent of its customers now use it.
11 - All stitched up
For many cutting expenditure on clothes would be harder than giving up smoking. Melbourne is the fashion capital of Australia, after all. But what percentage of your wardrobe do you wear and how many items did you buy for just one event, such as a wedding, or simply on a whim when you were feeling down?
It is time to plan your shopping. Cut out all impulse buys, the item will still be there in a couple of days if you decide you really do need it.
Also try taking a friend with you shopping and ask them to be ruthlessly honest. Does the colour do anything for you? Will it go with your other clothes?
Better still, only shop during the sales, at warehouse outlets or at op-shops.
Vivienne James, the author of The Woman's Money Book suggests people decide on a yearly amount for clothing and spend it all in one go. This forces the buyer to think about co-ordinating styles and colours, thus reducing the need for additional items.
12 - Log on for net gain
The internet offers a countless number of cheap products and services, ranging from mortgages and holidays to books and CDs, and it is all a mere click away.
However, the Australian Consumers Association urges caution as overseas online retailers are not subject to Australian retail laws.
It is best to know something about the product or service first, so check it out in the shops before you head online to make your purchase.
Security is still a concern, so always look for a locked padlock at the foot of your browser. And read the retailers policy regarding exchanges and refunds, particularly for goods damaged in transit.
The ACA says consumers should also be aware of the exchange rate. Many sites are based in the United States and quote US, not Australian, dollars. The Age business section carries the US dollar conversion rate every day.
13 - Healthy and wise
Like death and taxes, health insurance is now a fact of life after the Government introduced its Lifetime Health Cover.
The system penalises those who don't opt in and rewards those who do, with a 30 per cent rebate.
But when it comes to finding the right cover for you, not all health funds are equal.
For tips about choosing a policy visit the Australian Consumers Association's website at www.choice.com.au - click on "Money" under "Browse for Category" to reach the right links.
There is also an online calculator with more than 1400 different premium options - click on "Health Insurance" on the home page - but if you are not a member, you'll need to pay $8.25 to access it.
14 - Rent to buy
Instead of buying to rent, why not rent to buy? The first step is to move out of your house and into rented premises. You then let out your home and use the rent to cover the mortgage and upkeep, while saving as much as you can. Then apply for an investment loan from your financial institution. By the time you are ready to buy the new home, the value of your own home may well have risen. You can then move back for a short time and not get slugged with capital gains tax when you sell it.
15 - Travel wisely
With a war with Iraq looking ever more likely, don't be surprised to see even higher prices at the petrol pump.
Depending on where you live, you can save cash, help the environment and get healthy simply by jumping on a pushbike.
As always, financial planners say you should do the maths and compare the cost of a monthly train/tram ticket with the cost of petrol and parking.
If you have no choice but to drive, try winding down the windows rather than turning on the air-conditioning, as the air-conditioning drains the engine and uses more petrol.
16 - Making a meal of it
Much like cigarettes, the cost of food adds up faster than many people realise. Instead of paying the sandwich shop to slap a piece of meat between two slices of bread, do it yourself and pocket the difference.
It is much the same with that chocolate bar for the train trip home - $2 might not seem much, but over 250-odd working days in a year, it adds up to $500 for snacks.
Like a hot lunch? When you cook a meal at night, cook double and freeze enough for lunch another day.
17 - Get a makeover
A good haircut and a facial might seem a touch decadent, but at times we all need an indulgence. If you have followed our experts' tips, it is time to treat yourself. Don't worry - we're not suggesting you blow your savings, but like most things, a bit of pampering can be done on the cheap.
Hairdressing, beauty colleges and natural therapy schools offer cheap, and sometimes free, treatments to customers willing to be worked on by students. So sit back, have a facial and feel your belt tighten.
Each week financial advisor Noel Whittaker answers your
questions.
