In the last year, many people and families have felt the pressure of the increasing cost of living and have no doubt made some sacrifices along the way.
If you’re like many Australians who struggle with the cost of living, we’ve put together some tips to help you face rising costs which may make your money go a bit further.
1. Create a detailed budget:
This one might seem obvious but start by assessing your current financial situation. List all sources of income and categorise your expenses, including fixed costs like rent/ mortgage, bills, and debt payments, as well as variable expenses such as groceries, leisure activities and transportation. A clear budget will reveal where your money is going and highlight areas where you can cut back.
2. Prioritise essential expenses:
Identify your essential needs and prioritise spending on necessities like housing, utilities, and food. Trim non-essential spending by reducing expenses like eating out, subscription services, and impulse purchases. Limiting any unnecessary spending is key during a cost-of-living crisis. Look for opportunities to cut back or make changes to your habits.
- Try doing your grocery shopping online. This will help avoid the temptation or buying things on a whim.
- Try to buy what’s on special. You can freeze items you don’t need right away such as meat.
- Buy generic brand. Especially when it comes to cleaning products or pantry staples like flour, pasta, sugar.
- Use loyalty programs: Scanning your rewards card at the checkout is an easy way to save potentially hundreds of dollars on future grocery bills.
- Unsubscribe from emails: If you’re often temped by a sale, unsubscribe from the marketing emails of your favourite retail shops.
3. Negotiate bills and or cut out services:
Contact service providers, such as internet, cable TV, or phone companies, and negotiate lower rates, or reducing your service to essential needs only.
Take a look at your subscriptions as well. If there are streaming services that are rarely being used it could be worth cancelling and seeing whether you miss it after a few weeks – chances are you probably won’t! Its often all the small costs we don’t think about that can really add up.
4. Embrace energy efficiency:
According to Energy Australia, standby power could cost more than you realise and is responsible for up to 10 per cent of your power bill. Things like your microwave, TV, gaming console (or anything with a remote) are all on standby and continue to use energy even when not in use. If you can’t foresee yourself switching your TV off each time you use it, go for items you don’t use everyday such as your washing machine, dryer and air conditioner.
5. Consolidate Debt:
Debt consolidation is the process of taking out a loan to pay off a number of debts. If you have multiple debts with varying interest rates, consider consolidating them into a single, lower-interest loan.
Consolidating your debts provides a number of benefits with the most obvious one being the peace of mind in only having one loan repayment to manage. When you have three or four different debts, all at various amounts, repayment dates and interest rates, it can easily become overwhelming and stressful trying to keep organised and not fall behind in repayments.
Take advantage of Auswide Bank’s Low Rate Credit Card 0% Balance Transfer for 12 months*.
A balance transfer is the process of moving the amount owed on one or more of your credit cards to a different credit card. By moving the amount owing to a credit card with a 0% Balance Transfer offer, it means you won’t have to pay any interest on your transferred credit card debt for the length of the advertised offer.
6. Explore alternative transportation:
Consider using public transportation, carpooling, biking, or walking to reduce fuel costs and vehicle maintenance expenses. If feasible, consider downsizing to a more fuel-efficient vehicle.
Another option to consider is reducing the number of vehicles in your household. If you have multiple cars (or motorbikes) for each person in the house, reducing the number of vehicles could save you money on registration and maintenance costs. Not to mentioned selling would give you some extra cash back in your pocket!
7. Reevaluate housing options:
If housing costs are a significant portion of your budget, explore your options.
Call your bank and talk to a lending consultant about whether you could refinance your loan to a lower interest rate. Many people treat their home loan as a set-and-forget, but refinancing to a lower rate could reduce your loan repayments and shorten the term of your loan.
Considering refinancing? Talk to an Auswide Bank lending consultant.
Other options that might work for you could include:
- Downsizing if you’re empty nesters or if you’re not utilising the whole house.
- Moving to a more affordable area that you and your family would still be happy to live in.
- Taking on a roommate to share expenses if you have the space.
- Taking on an exchange student which could provide an additional source of income while being a great experience for the family.
8. Build an emergency fund
While this might not be tip for saving in the short term, building an emergency fund can help you in the long run when and especially during uncertain times. Set aside a portion of your income each month and avoid dipping into this fund unless absolutely necessary. When that unexpected bill come out of nowhere, you won’t need to scramble to gather the funds.
If you are one of our loan customers and you’re experiencing financial hardship, for example due to illness or unemployment, please let us as soon as possible by contacting one of our Loan Payment Consultants on 1300 077 969.
This information provides general advice only. We do not provide advice about this product based on any consideration of your personal objectives, needs or circumstances.
*The Balance Transfer offer can be withdrawn at anytime without notice. Balance transfers from other Auswide Bank credit cards or loans may not be accepted. Upon expiry of a Balance Transfer offer, any unpaid balance of the Balance Transfer reverts backs to the Purchase Rate.