Small changes which could save you $27,000 a year

Nearly a third of Australians are servicing debt three or more times their annual income.

But experts say with a little bit of hard work and some small changes, the average household could save thousands.

Krysti-Lee Rigby earns a decent wage as a pharmacist

But like many Australians she struggles by the end of the month.

"The way that we live, everything is all online or direct debits or coming off the credit card, you don't actually see the money that you're spending," she said.

"And so, yeah, sometimes by the end of the month you're like, oh hang on a minute what's actually happening here?"

Ms Rigby has signed up to a new money challenge being run by financial guru Effie Zahos, who's adamant Australians can save thousands

"$27,000 in one year is quite possible," she told 9News.

"Depends where your money is going.

"Possibly the best money tip I've ever received is, it's not what you earn that counts - it's what you spend."

Effie's challenge is available on the financial comparison website, Canstar.

But the principals of the program can be followed by anyone.

The first step is to draw up a budget

Almost a third of Australians don't have one.

You can download a free template on the Government's MoneySmart website

Laura Higgins from ASIC's Moneysmart said it's good to know what you're spending cash on.

"I think it's really comforting to know where your money's going and after you've had a look I think we can always find one or two items to save some money," she said.

Step two is to re-evaluate your home loan.

The average advertised variable rate on a $500,000 loan is 3.75 per cent.

But the lowest rate advertised is 2.69 per cent - and depending on fees, a switch could save you more than $8000 a year in loan repayments and interest.

The third part of the challenge is cutting your electricity bills, by calling around different providers to get the best deal.

Step four, is to check your insurance.                                

Are you getting the best price for your car, home, and health insurance?

Subscription services are also in need of a reality check.

Krysti-Lee found savings there straight away.

"I myself was able to save $200 a fortnight," she said.

The next step in your financial makeover is to check your superannuation is on track.

Look at how your fund is performing, what fees you are paying - and if you will have enough to fund the retirement lifestyle you want.