The word “thrifty” is rarely thought of in a positive sense but that’s not fair because if we continually spend more than we earn, our debts will eventually catch up and other words such as “default” or “bankrupt” might become more familiar.

Being thrifty doesn’t mean doing without – quite the opposite. Here are six simple tips to build up your savings.

Create a budget and stick to it

Before you can get your spending under control you need to know exactly how your income compares to your expenses. There are many free online budgeting tools available, such as the MoneySmart Budget Planner found at  www.moneysmart.gov.au.

There is also a multitude of smartphone apps that can help you to record everything you spend. This can be an interesting exercise. At the end of every month, you can easily compare your total purchases and outlays to your budget. You might be amazed to see where your cash is actually going.

Be debt smart

Make a list of your debts and organise them in order of annual interest rate. Those with the highest rates (most likely your credit cards) should be paid off first, especially as the debt is not tax-deductible. It rarely makes financial sense to invest money to receive 5%pa while you are paying credit card interest of 20%pa – or more.

Time for a mortgage check-up?

Like all things, mortgage products change – particularly with interest rates at record lows. If you are more than five years into your mortgage, it could be time for a review. Check with your lender to ensure you’re getting their best rate. You might be astonished at the deals lenders are prepared to do to keep your business.

Get creative in the kitchen

Have you looked deep into your kitchen pantry lately? At least once a week gather up the household and get creative. Brainstorm how to use some of the existing ingredients from your pantry and fridge (those that are still edible!) in new and different ways. This creative exercise will not only be fun, but will save on your grocery bills.

Switch and save

When was the last time you compared costs on your home/health/car insurance, phone plans, gas and electricity? By shopping around and negotiating a better deal you could save significant dollars on your monthly spend. There are helpful websites to make comparison shopping much easier but be aware that they only list providers who have paid to be promoted on their sites.

Be organised!

Most people are amazed at how many gifts they buy each year, often at the last minute. By establishing a gift list and allocating a set budget for each recipient well ahead of time, you can progressively buy gifts on sale during the year. This will certainly help your cash flow and circumvent overspending by avoiding that last minute rush.

As you watch your bank balance increase, enjoy the feeling of being in control and knowing you can have whatever you want with just a little discipline.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.