Debt Street

Reporter: Gavin Alder

Fiona Lippey's journey down 'debt street' shows how any household can reduce the family spend by thousands.

Fiona Lippey preaches saving, and when Today Tonight sent her back to a street drowning in debt, she was naturally a little nervous about what she'd find.

On debt street she found it easy to convert young parents Daniel and Linda who have cut their weekly grocery bill in half. They are now saving an astonishing $15000 a year and it is making a big difference to the family.

"We're not withdrawing on our savings," the couple said.

"We have learned to menu plan, which has obviously reduced our shopping bill because we only buy what we need for that fortnight," Linda said.

Cathy has gone from name brands to home brands and stuck to set menus, and while her savings aren't spectacular, she knows a dollar saved is a dollar earned.

It all boils down to the 'Five P Principle' - preparation and planning prevents poor performance.

Gordon and Judy had been slaves to their credit cards and this is where Fiona saw massive savings. They've now cut their spending in half.

"This whole process has made us think a bit more about when we use it and what's the best time to use it," Gordon said.

After meeting Fiona, Sandra and Jane worked out they spent way too much on things they wanted, but didn't need - things like take away coffees and expensive lunches and fancy appliances that never get used.

"If we weren't following what Fiona had set out for us, we would be going under by now. We would be so much in debt that it would be hard to come back out again," they said.

"We've created a spreadsheet and worked out our credit cards, where all our expenses are actually going, so we know exactly where every penny's been spent. It's stopped our impulse buying," Sandra and Jane said.

Michael too has bitten the bullet, selling a non-performing investment property. With other savings suggested by Fiona, Michael's shaving $15,000 a year off his expenditure.

Fiona's cruise along 'debt street' did encounter one snag. She told Leslie to get rid of the car that never left the garage, but Leslie kept it anyway.

"We did the pros and cons and this is maybe the best way to keep this one and get rid of the other," Leslie said.

But Leslie is making savings elsewhere and feels more in control.

"I didn't have a budget at all and now I do have a budget sort of to work from and I know what I need to buy and what I need to cook and it's healthier, it's healthier living," Leslie said.

Fiona has a wonderful strike rate in 'debt street.'

"When we arrived no one had any idea what they were spending on things, they were in financial denial," Fiona said.

"This street's well on the way to saving nearly $400,000 a year," she added.

"It's one thing giving advice, but another thing when everyone takes it."

Fiona's key tips for reducing the family spend:

1. Count your spending in hours. If you earn fifteen dollars an hour, is coffee and cake at seven fifty worth half an hour's work?

2. Take control - keep a diary of where you spend your cash on what you spend it on.

3. Cut out impulse purchases - make a shopping list and stick to it.

4. Ditch the credit card - stick to cash - it'll make you think twice about purchases.

5. Treat yourself to something special - once you hit a savings goal.

Further information

For further information on Fiona's plan, visit www.simplesavings.com.au