The unfolding debt crises in Europe and the United States, combined with fears about how it will affect Australia, have spooked a lot of would-be spenders. As a result, most people are saying they want, or need, to save money. Yet, despite improved savings habits, as a nation, Australians owe $43 billion to creditors.

Taking a very close look at your day-to-day expenditure may be the answer to reducing your cost of living, and using otherwise wasted money more wisely in other areas, such as a future investment.

There’s no reason to wait for a new year’s resolution- if you'd like to make regular saving a part of your life, read on to find out Your Money Magazine’s top tips on where to cut back, and find that extra money you’ve been searching for. Whether you partake in one or all of these costly habits, it’s never too late to revaluate your lifestyle. The first step is recognising (and changing your habits!) across these common money wasting activities:

1. Coffee – According to the Gilkatho Cappuccino Price Index (CPI), this year Australians will consume 2.7kg of coffee per person, and spend an average of $3.31 per takeaway coffee. There are approximately 220 working days a year, so if you drop into your local café on the way to work each morning, be aware you’re spending $728.20 a year on your morning ritual. This may be a reasonable expense for some, for others- the reality of your habit may be hitting home.

If you can’t say goodbye to your morning cuppa, consider the savings you can make with a home espresso machine, where the average price will set you back 50-70c a cup.

2. Cigarettes – One packet of 25 cigarettes will set you back approximately $14. Pack-a-day smokers fork out $5,110 a year. Casual smokers, at a pack-a-week, will spend $728 this year.

At today’s prices, if you smoke one pack of cigarettes each day for ten years, you’ll spend over $51,000. What could you do for yourself and your family with that extra money? The reality is a lot more than you think. For a smoking cost calculator click here.

And yes, you read correctly- $51,000 gone in a cloud of smoke.

3. Alcohol Australian’s have a reputation as being big drinkers, and the data is there to back it up. According to the Australian Bureau of Statistics, in 2009-10 there was more than 12.8 million litres of pure alcohol available for consumption in Australia, equating to around 2.3 standard drinks per person per day.

Drink prices vary significantly according to location, but assuming even $4 per drink, (to account for bottle shop and bar price variation) the average Australian will spend $3,358per year on alcohol.

(2.3 standard drinks a day x $4 per standard beverage = $9.20 per day; $64.40 per week; $276 per month; $3,358 per year)

4. Weekday lunches – With Australians having to fit in more and more into every day, a lot of us will fork out $10 for the convenience of a bought lunch on most work days.

If you buy lunch five days a week, factoring in an average of 220 working days per year, you’ll spend approximately $2,200 this year alone on lunch. With a loaf of bread costing as little as $1.00- we’ll leave this one to you.

5. Late fees and interest charges – Despite constant plans to tackle the debts, for many, credit card debt has become a way of life. The Reserve Bank tells us that as a nation we owe $43 billion in credit card debt, and shockingly, $33 billion will be paid by Australians each year in interest, late fees and hidden charges.

The average Australian credit card debt sits at $3,085. To get back in the black within two years, (even if you’ve got a low interest rate of 15.5%), you would have to shell out $150 every month and over the life of the debt, pay more than $500 in interest.

-Stephanie Zillman