How to combat the rising cost of living

Sloan Wilkins is a Financial Coach with more than 30 years’ experience in Banking, Financial Planning and Wealth Management. He holds an Executive MBA (AGSM) and Financial Planning qualifications but learnt the most from making his own financial mistakes as a young adult and clawing his way out the other side. Sloan is passionate about ending financial stress for his clients.

If you’re feeling the pressure from rising prices, you’re not alone. Whether it is filling up at the bowser, doing the weekly shop, or looking around at house rental and sale prices ….it’s all going UP. 

It may seem like a helpless situation, but the good news is you can take back some control. 

Why is this happening?

Recent global events, such as the war in Ukraine, have contributed to prices spiking, but the cost of living was heading up even before this with the impact of COVID-19.  

Believe it or not, prices were falling back in June 2020 (Aussie inflation was negative 0.3%). Since then, prices have been charging ahead with inflation now at 3.5% (year ended December 2021).  That’s a big change in a short time, so no wonder we’re feeling it.

But enough of the economics. What matters now is how we can control our own spending. 

How to save money in your budget 

  • Shop your pantry – most of the time the cupboard isn’t bare. Rather than hitting the supermarket for a weekly or fortnightly shop out of habit, stop for a minute and see what you’ve already got.  You’d be surprised how many meals you can create out of what you already have at home.  It’s not an ongoing solution but it can save you $50-$100 easily.
  • Subscriptions and memberships – have a look over what you’re paying for and cancel what you don’t use regularly. Think streaming services, newspapers, hobby clubs etc. Or take a break from all of them, you can always add them back later.
  • Petrol – use your rewards card to access petrol discounts. Also plan your weekend trips around what you need to get and where you’re already going. You can also try taking public transport to work for a few days each week. Or if you’re close enough, enjoy a walk, run or ride – good for the body, mind, and your wallet!
  • A bite to eat – it’s an oldy but a goody – take your lunch to work. Make some healthier choices and you’ll reduce your weight and your expenses. Also eat at home before you hit the shopping centre on the weekend – it’s way too easy to blow $50 or more on coffee, snacks, or lunch.
  • Give the shopping a break – this rule is for both online and in person shopping.  No matter how good the discount, if you don’t need it, don’t buy it. Don’t fall for clever marketing that moves the money from your pocket to theirs. 
  • Home Loan – the competition is hot for good customers who pay on time, so ask for a better rate from your existing bank – they don’t want to lose you.  Also, it’s a whole other topic but consider whether a fixed rate is right for your situation.
  • Utilities – your electricity, phone, and internet are big regular bills. Spend 30 minutes on Google or on the phone and grab the savings.  It’s well worth checking around and it’s easy to change companies.
  • Private Health Insurance – premiums are increasing again in April for most insurers. This makes it perfect timing to look for the best deal. Some insurers are so keen to get your business that they are offering up to 8 weeks free.
  • Gambling – Aussies love a punt, however if you’re looking for a guaranteed win, this could be an area to reduce or eliminate.
  • Cigarettes – Definitely a challenge to give up, though the savings are well worth it.
  • Alcohol – All things in moderation, but make your purchases from the bottle-o stretch further by adding extra alcohol-free days into your weekly schedule.

Where NOT to cut back

  • Family outings – you can enjoy time connecting with your family without it costing a bundle.  Head to the local park with a picnic blanket, some snacks, and the footy.  Check out your local newspaper for free community events.  Get active together and find the Park Run in your local area (it’s free).
  • Strike a balance – if you go to the extreme on saving, the rubber band snaps back hard, and today’s cutbacks turn into tomorrow’s blowout. If there is something you love, like a weekly training session, then look to cut back in other areas.

Been a while since you made a budget?

Step 1 Find the ends 

Get down on paper how much your income is and add up your expenses

Step 2 – Have a look at your spending 

What sticks out that needs attention?

Step 3 – Prepare a written budget

Write it down, on paper and on purpose, before your pay arrives

The benefits include:

  • Controlling your income is essential for financial peace and building wealth
  • A budget allows you to pinpoint opportunities for positive change
  • A budget puts you in control and provides freedom

The cost of living will continue to be an issue for a while. For sure we’ll get some sweeteners thrown at us as the Federal Election gets closer, but that should be icing on the cake.  

It’s important to know that financial stress is a common thing. You’re not in this alone and no matter where your finances are right now, you can set a new direction and take actions that will deliver a better future. You’ve got this.

Leave a Reply

Your email address will not be published.