Debt reduction

Not all debt is equal, and the first step is to tell the difference. "Bad" debt funds things that lose value or don't earn income — credit cards, personal loans, buy-now-pay-later, car loans. It usually carries high interest and is the priority to clear. "Good" debt helps build wealth or is low-cost — a mortgage, or a HECS-HELP debt (low interest, indexed, repaid through the tax system). You generally tackle the bad debt hard while letting the good debt run its course.

Two payoff strategies

• Highest interest first (the "avalanche") — you pay the minimum on everything, then throw every spare dollar at the debt with the highest interest rate. This costs you the least interest overall and is normally the mathematically better strategy.
• Lowest balance first (the "snowball") — you clear the smallest debt first for a quick win, then roll that repayment into the next. You'll usually pay more interest than the avalanche, but the psychological momentum of seeing debts vanish keeps many people going. The best strategy is the one you'll actually stick to.

The minimum-repayment trap

Paying only the minimum on a credit card is the slow road to nowhere — most of your payment goes to interest, and a modest balance can take many years and cost more than the original amount to clear. Always pay more than the minimum where you can, and target the card with the highest rate first.

Tools that can help

• Offset or redraw — if you have a mortgage, money in an offset account reduces the interest you're charged while staying available to you. A very efficient way to "save" against good debt.
• Balance transfers — moving credit-card debt to a low- or zero-interest introductory rate can help, but only if you clear it before the rate jumps, and you stop adding new spending.
• Debt consolidation — rolling several debts into one lower-rate loan simplifies repayments, but be careful: stretching the term can mean paying more interest over time even at a lower rate.

If debt has become unmanageable, free confidential help is available — the National Debt Helpline (1800 007 007) offers financial counselling at no cost. Use the debt reduction calculator above to compare strategies with your own numbers.

Cost of travel

• Planes, boats, trains, cars and buses. This is hard to predict but try.
• Entertainment and sightseeing. Bars, shows, restaurants, places of interest etc.
• Food that you prepare yourself
• Clothes and special equipment
• Vaccines and visas
• Internet costs - a rising expense
• The cost of borrowing

Budget

A budget is simply a plan for your money — deciding where it goes before it disappears. The point isn't to restrict yourself, but to make sure your spending matches your priorities and leaves something for the future. Start by tracking where your money actually goes for a month or two (bank apps and the government's free Moneysmart budget planner both categorise this for you), then build a plan from what you find.

The 50/30/20 rule

A popular starting framework splits your after-tax income three ways:

• 50% needs — rent or mortgage, groceries, utilities, transport, insurance, minimum debt repayments;
• 30% wants — dining out, subscriptions, hobbies, holidays, discretionary shopping;
• 20% savings and debt — emergency fund, savings goals, extra debt repayments, investments.

It's a guide, not a law. In much of Australia housing alone eats 30–40% of income, so for many households the "50% needs" slice is unrealistic — needs can run to 65–80%. If that's you, the rule still helps as a target to work towards: protect a minimum savings buffer (even 5–10%), and look hard at the big fixed costs rather than the small discretionary ones.

Zero-based budgeting

A more precise method: assign every dollar of after-tax income a job — essentials, savings, debt, and even small discretionary categories — until income minus everything allocated equals zero. Nothing drifts into vague "miscellaneous" spending. It takes more effort but gives you complete control, and suits people who want to squeeze the most from a tight budget.

Making it stick

• Automate it — direct-debit bills on payday and auto-transfer savings before you can spend them ("pay yourself first").
• Attack the big-ticket items — a better deal on your mortgage, energy or insurance saves far more than skipping coffees. Compare energy plans on the government's Energy Made Easy site and review your loan rate yearly.
• Review quarterly — adjust for rate changes, CPI, and seasonal bills like insurance renewals.
• Keep an emergency fund — ideally three to six months of essential expenses, so an unexpected bill doesn't become a debt.

Use the budget calculator above to build a worked example with your own figures.

Rent or buy

The case for buying

Buying a home has clear attractions: the security and pride of ownership, a good chance of long-term capital growth, protection from rent increases, and the fact that the family home isn't counted in the Age Pension assets test. It's also a form of forced saving — every repayment builds equity.

But it carries real costs and risks: it's usually more expensive than renting in the early years, you're exposed to interest-rate rises on the mortgage, and you're liable for maintenance, council rates, insurance and strata. Large upfront costs (deposit, stamp duty, legal and building inspections) tie up capital, and if you have to buy further out to afford it, the commuting cost can offset the saving.

The case for renting

Renting isn't "dead money" — it buys flexibility and predictability. You can move easily for work or lifestyle, you're not responsible for maintenance or the costs of ownership, and you avoid the large deposit and transaction costs. Crucially, renting can free up capital: if you invest the difference between renting and the true cost of owning (deposit plus ongoing ownership costs), a disciplined renter-investor can do well — though only if they genuinely invest the difference rather than spend it.

The drawbacks: you're exposed to rent rises and the possibility of having to move, you build no equity, and you have less security of tenure.

It's not only about the money

The rent-or-buy decision is part financial, part lifestyle. Two questions matter as much as the numbers: how long will you stay? (buying rarely pays off if you sell within a few years, once transaction costs are counted) and what's the opportunity cost of your deposit? (could it earn more invested elsewhere?). There's no universal right answer — it depends on prices and rents where you are, interest rates, how long you'll stay, and how you'd use the money if you didn't buy.

Use the rent or buy calculator above to compare the true cost of each for your own situation.

Wedding costs

Weddings can cost anywhere from a few thousand dollars to tens of thousands, depending on guest numbers, venue, catering and the day of the week. The big-ticket items are usually the venue, food and drink, followed by photography, clothing and entertainment. Set a budget early, decide what matters most to you both, and track spending against it — many couples find costs creep well beyond the original plan.

Education costs

School fees

Use the calculator above for a worked example with current figures.

University fees

University fees range from $20,000 to $50,000 depending on the course chosen. Fee-help is available to some students. For those who qualify, the government pays the fees up-front and the student repays once they start earning income. The amount repaid depends on how much is earned.

Other costs

Fees makes up just one part of the total cost when paying for education for your child. Other costs you need to consider include:

• Computers
• Uniforms
• Travel
• Excursions
• Extra curricular activities
• Tutoring and other outside school learning
• Boarding fees

Add these costs to tuition fees if you have an idea of how much they will be.

What it costs to educate a child in Australia

Education is one of the largest expenses a family plans for, and the numbers vary enormously by sector, state and school. The figures below are indicative national averages and ranges for 2026 — use them as a planning guide, not a quote. Fees at any individual school or course can sit well outside these bands.

Preschool and childcare

Long day care nationally averages around $140 to $150 a day before subsidy, and more in the major cities — commonly $150 to $210 a day in metropolitan Sydney and Melbourne. The Child Care Subsidy (CCS) reduces this substantially: families earning under about $85,000 receive 90%, tapering down as income rises and cutting out around $535,000. From 5 January 2026, all eligible families receive at least three days (72 hours a fortnight) of subsidised care, regardless of activity. Government-funded kindergarten in the year or two before school is free or low-cost in most states.

Government (public) schools

Public schooling is often assumed to be free, but it isn't cost-free. On top of voluntary contributions, families pay for uniforms, devices, textbooks, excursions, camps and sport. These typically run from a few hundred dollars to several thousand a year, and the total cost across 13 years of a government education is commonly estimated at around $80,000 or more once all the extras are counted.

Catholic schools

Catholic systemic (diocesan) schools are usually the most affordable non-government option, because they receive a large share of government funding. Indicative annual fees:

Sibling discounts are common in the systemic system, which can materially reduce the cost for larger families.

Independent (private) schools

Independent school fees cover a very wide range. National averages sit around $15,500 a year for primary and $27,500 a year for secondary, but elite GPS, APS and CAS schools charge $42,000 to $55,000 a year for Year 12, with boarding adding a further $25,000 to $45,000. Just as important, the headline tuition is only part of the bill — uniforms, devices, camps, music and co-curricular costs commonly add 25% to 60% on top. A family budgeting $30,000 in tuition should realistically plan for $38,000 to $45,000 all-in.

University

Most domestic undergraduates study in a Commonwealth Supported Place (CSP), where the government pays part of the cost and the student pays a student contribution banded by field of study. For 2026 these range from about $4,738 a year (Band 1 — e.g. teaching, nursing, agriculture) to about $16,392 a year (Band 4 — e.g. law, commerce, medicine).

Students can pay upfront or defer the cost with a HECS-HELP loan, repaid through the tax system. From 2025–26, repayments apply only to income above $67,000, on a marginal basis. HELP debt is indexed each 1 June (about 2.8% for 2026). Full fee-paying students instead use FEE-HELP, which has a lifetime limit of about $136,788 (or $170,984 for medicine, dentistry and veterinary science).

Vocational education (VET / TAFE)

VET and TAFE fees are set largely by the states, so they vary — some states offer fee-free courses in priority areas, and all offer government-subsidised training. Approved diploma-level courses can be funded through a VET Student Loan, repaid under the same income-contingent HELP system as HECS. The overall HELP loan limit for 2026 is about $129,883 for most students, which covers all HELP borrowing (HECS-HELP, FEE-HELP and VET Student Loans combined) over a lifetime.

Figures are indicative 2026 national averages and ranges, compiled from government and sector sources; individual schools, courses and states vary. This is general information only, not personal financial advice. Use the education cost calculator above to model your own situation.