Four tips to manage the rising cost of living
With consecutive cash rate rises, it's no surprise Australians are getting stricter with their spending. We've compiled our top 4 tips to help you manage the rising cost of living.
April 04, 2023 • Last updated October 23, 2023 • 6 min read
From your weekly groceries to your home loan, the rising cost of living has crept up on all of us. Rather than sticking our heads in the sand, many Australians are taking the initiative to better manage their spending. According to Finder, approximately 11 million Australians are taking action against rising expenses, with 48% adjusting their living standards. Some are resorting to selling cars, downsizing, moving back in with family, or even buying fewer groceries. No matter what your situation, it’s likely your spending habits have had to change to accommodate the rising cost of living.
If you’re ready to become a more savvy spender and boost your savings, have we got some tips for you. This guide will outline four ways Australians can get a better handle on managing their expenses with the rising cost of living.
Why is the cost of living so high in Australia?
Whether you’ve noticed a price difference in your favourite chips or experienced price shock when filling up at the petrol station, Australia is currently experiencing record inflation levels. Many experts argue this is a flow-on effect from the effects of the Covid-19 pandemic, large consumer demand and Russia’s invasion of Ukraine.
To curb the rising cost of living in Australia, the Reserve Bank of Australia (RBA) has delivered a jaw-dropping twelve consecutive cash rate hikes (at the time of this article, October 2023), attempting to target an inflation range of 2-3%.
This has forced several businesses to increase the cost of their products and services, as prices for materials, staff and other necessities have skyrocketed. The problem is that Australian wages have not kept pace with these changes, leaving many households financially worse off.
With the rising cost of living, many households have had to adjust their spending habits, from their weekly grocery shop to rethinking their utility providers. Without further ado, let’s explore four ways Australians can manage expenses during this time.
Embrace mindful spending
With the rising cost of living, there’s no better time to revisit your monthly budget to ensure you’re managing expenses appropriately. Most of us tend to fall into bad habits when it comes to spending, whether it’s having one too many take-out meals or letting plans and policies roll-over without reviewing them beforehand. By noting where your money is going, you’ll discover areas to cut back on and become more mindful of your spending.
If it’s your first time having to make a budget, we suggest tracking your spending for the month before putting one together. This way, you can create a realistic spending plan that keeps your money in check. Keep things simple and accountable by using free money management or budgeting apps online. If you’re a spreadsheet wizard, that’s a good place to start too. Check if your internet banking gives you the ability to export your transactions to give you some baseline data. Some may go a step further and categorise your spending so you know exactly what is essential and what’s considered discretionary (non-essential).
Be mindful of your energy consumption
Did you know that energy bills are one of the average Australian household's biggest expenses? That means there are big opportunities to save despite the increasing cost of living. One easy place to start is by reducing your energy consumption wherever you can.
For instance, washing your clothes in cold water rather than warm water. Most of the time, our clothes don’t need to be washed in warm water, allowing us to save on the electricity required to heat the water. Give your dryer a break too and harness the power of the sun with some good ol’ fashioned line drying. Other methods include switching off appliances at the wall, taking shorter showers and keeping your heating and cooling appliances at energy-efficient temperatures.
However, one of the biggest ways to save on your energy bills is to switch to a more competitive offer. This is especially important if you have been with your provider for a while, as there may be cheaper deals out there. Take the time to shop around, compare plans, and make the switch. Alternatively, you can call your current provider and ask for a better deal — you might be surprised at how much they’ll work to keep a customer onboard!
Increase your income
In addition to saving money, it is worth looking for opportunities to make more. Of course, this is easier said than done, but the more money you have, the more power you have to manage expenses and chip away at your savings goals.
If you are in a position to do so, it might be time you sat your employer down and asked for a salary increase. Just ensure you’re prepared to negotiate and provide evidence of why you deserve a pay rise.
The share and creator economy have seen side hustles become faster and easier to launch. If you have a vehicle or a skill that you can share (and where time and resources allow), you could swap out your daily Netflix binge session with dog walking, ride-sharing, copywriting, editing, graphic design, gardening, and odd jobs around the house. Before you take the leap, it might be worth checking in with your accountant or financial advisor to see if there could be any significant impacts on your taxable income.
Refinance your home loan
If there’s one thing households are feeling the pinch of, it’s their monthly home loan repayments. Interest rates increased throughout 2023, and the RBA has shown no signs of slowing down with cash rate hikes. For borrowers with variable home loans, this means they could be paying hundreds of dollars more in interest. Do yourself and your wallet a favour by refinancing your home loan to a better deal.
One easy way to check how much you could save is by playing with our refinance calculator. Simply plug in your home loan details, and we’ll tell you how much you can save by switching to Tiimely Home, plus you can see how much faster you’ll pay your home loan off, the amount you’ll save in interest and fees and what your new monthly repayments could look like!
Want more tips and ideas on how and where to save? Don’t worry, we’ve got plenty of guides to help you get closer to becoming a super savvy saver.
- 7 ways to hack away at your home loan deposit savings goals, totally relevant even if you’re not saving for a deposit
- 6 ways to get into investing as a beginner
Already a super saver? Here’s a guide on what you can do with your refinance savings.
Snag a better home loan deal by switching to Tiimely Home
Looking to protect your home loan from another rate rise? Tiimely Home can help. We are an online lender revolutionising how Australians think about their home loan. Tiimely Home combines ground-breaking technology with exceptional customer service, automating the home loan application process.
We are proud to be a responsible lender and offer competitive rates to customers who qualify for our home loans. Whether you’re a first home buyer, an investor or a refinancer, we are committed to finding the right loan for you. If you would like more information about our suite of loans, please contact one of our helpful team members today.
By Diem Tran