Spending less money than you earn might sound like a no-brainer if you're trying to save but you only have to look at the high levels of credit card debt people carry to know not everyone follows that mantra.

If you can live by that simple rule, chances are you will be able to find some money to put aside after paying for the essentials.

It's easier to save if you have something to save for, an adviser with Centric Wealth, Debbie Turvey, says.

Once you have a goal in mind, pay yourself an allowance before you are tempted to spend the money you'd like to put towards your goal.

"Decide on an amount and practise saving that amount into an account that can't be accessed via an automatic teller machine," Turvey says. "If you find you can stick to that amount and still pay all your bills, then you can start to invest the money."

A budget will give you a clearer idea of what your expenses are and where you might be able to save. Many people dislike budgets but you shouldn't use that as an excuse for not putting money away.

"If you get the saving side of things sorted you can start planning for financial freedom, which gives you the option as to when you can stop working or reduce the hours you work and live off the passive income from your investments," Turvey says.

Spending Habits

An adviser with Woodbury Financial Services, Errol Woodbury, urges people to rid themselves of the "gotta have it now monster" and really think about their spending habits.

There are several categories of spender that demonstrate why we break budgets and become bonded to debt.

Impulsive spenders: Have to have it now! Seeing a sale or buying from a retailer offering an interest-free deal can be a big trap.

Compulsive spenders: Often spend to cheer themselves up when they're down.

Boredom spenders: Shop for something to do.

Special-interest spenders: Have an expensive hobby and can spend twice their annual income buying a boat or a motorbike when they're struggling to make ends meet.

Status spenders: Try to "keep up with the Joneses".

These behaviours should be avoided at all costs.

"All these can take you off your plan and away from financial freedom and into financial bondage if not kept at bay," Woodbury says.

Where to save

If your goal is to save for retirement, salary sacrificing into your superannuation is one of the most tax-effective ways but if you want to use the money sooner, you'll need another strategy.

An online savings account is a simple, low-cost and high-interest-paying option that will suit most savers, a financial analyst with online financial product comparison site Canstar Cannex, Peter Arnold, says. For account balances of $5000 the best online savings rates are about 5.5 per cent. (See page 52 for the best savings rates.)

Some accounts will pay a higher rate for meeting certain transaction conditions, such as no withdrawals and at least one deposit in a calendar month.

"Bonus savers or incentive savings accounts are a good option for people saving for a particular goal and wanting a bit of extra motivation to save and not take money out," Arnold says.

Promotional rates are higher than ordinary rates. They act more as an incentive to choose a product. Arnold says investors need to be aware of how long the special rate lasts and the interest rate it reverts back to.

"If the revert [rate] doesn't stack up when the promo is over, look around for a better deal," he says.

For those people who don't need access to their savings, term deposits could be a good option.

Generally, the more money you have and the longer you are prepared to lock it away for, the higher the interest rate will be. Returns of at least 7 per cent can be found on a three-year term deposit.

Next week, in the Financial Check-up series, we look at investment property.

Case Study

Teacher Jasmine Crewe is a reformed shopaholic. Several credit cards were always at their maximum limit thanks to constant purchases of "luxury" items.

Before having her children — Tahlia, 2, and Samuel, nine months — if she got into debt she knew she could just work it off.

But with a sizeable mortgage and strong desire to spend as much time as possible with the kids, she decided to get serious about saving money.

First, she cut up three of the credit cards and reduced the limit on the last one from $10,000 to $1000.

"I came to the realisation that I can't live with a credit card," Jasmine says. "I just don't have the discipline to not use it."

Everything she and her husband earn is now placed in a mortgage offset account in an effort to minimise the interest they pay.

Jasmine also started making small changes that are adding to the savings.

She has halved her weekly shopping bill from $250 to $120 by using a meal plan rather than aiming to stock the cupboard every week. Cooking from scratch, breastfeeding and using cloth nappies has also helped the grocery budget.

"It is pretty silly having a cupboard full of unused food when there is a mortgage to be paid," she says.

When her husband cooks a meal he makes enough for four meals, which can be frozen. This saves money, gives Jasmine more time with the children and eliminates the need for takeaway on busy nights.

"After going backwards for five years, our budget is actually in the black for the first time," she says.