Households are doing it tough. Here's how to tighten your belt

There's not much individuals can do about the big picture. But if we need to tighten our belts at home, it's helpful to look at older generations, who were experts in making sure they spent less than they earned.

What can you learn from another generation's more frugal outlook?

Budget: your grandparents or parents most certainly had a budget. Good budgets plan the outgoings each month - right down to walking around money - and stick to it. If you can control your costs, your income will go further.

Goals: try setting goals. Once you know what you're aiming for, sticking to a budget makes sense and you're less likely to buck your own rules.

Cost reduction: go through all your monthly costs and challenge them. Every household can save money - sometimes it could be a second look at a cost: do you still use all the shows you pay for on cable? Do you need the biggest phone plan?

Finance: owning a house is expensive and that usually means a large mortgage. As you control your costs, don't forget about the price of your home loan. On variable rate loans, there's usually a spread of at least 1 per cent between the lowest and highest interest rates. On a $500,000, 30-year variable rate loan, the difference between paying 4 per cent a year and 5 per cent is about $300 a month. What could you do with that extra money?

Plans: while you hunt for the best deal on your mortgage, get serious about the plans you're on for power, gas, phone, internet and TV streaming plans. Don't be a set-and-forget consumer. Most households can save hundreds a month by using internet comparison sites and finding the best deal for the basics.

Cars: if you're always on a lease or finance for a new car, do a simple comparison of the finance on that car if it was one year old. Remember that a used car can produce significant monthly savings to your household.

Experts: some aspects of a household, you can't afford to get wrong, regardless of how much you save. Use experts such as insurance brokers and mortgage brokers to ensure you're not paying too much for crucial products (or paying for something you don't need or can't claim on).

Lifestyle costs: the older generation were very good at eliminating the services they could perform themselves. You can save a lot of money this way: $4 coffees, cafe-bought cookies, restaurant lunches, shirts ironed at the dry cleaners and even getting your hair coloured. Try the DIY approach and save big.

Savings: always have some money tucked away. It's cheaper to use your own cash for unexpected costs, than using a credit card.

The older generation used to say that a penny saved was a penny earned. Getting disciplined about how much you're spending puts more money in your pocket and gives you back control.

Mark Bouris is executive chairman of Yellow Brick Road.