Cost of living pressures will continue to grow for many Australians, with the RBA raising interest rates, rising energy and petrol prices and skyrocketing grocery bills.
So where can you find the extra money to help cover basic needs? Here are some expert tips to help you stick to your budget.
Evaluate all your expenses
Most financial experts recommend starting with your current expenses.
Start by looking at where your money is going and writing it down.
It’s hard to know how to fix it if you don’t know where your money is actually going.
Start with three categories:
- Must pay, such as rent or mortgage and utility bills
- Open to negotiation, such as groceries and insurance
- Additional expenses, such as takeout and streaming services
Once you see the hard data on how much you’re spending, you can make a call on what you can reduce.
Stay At Home Mum founder Jody Allen knows all too well the importance of this process.
In 2009, she was fired while on maternity leave and pregnant with her second child.
She then completed an expense overhaul so her family could cover their mortgage payments, and it started with her food bill.
How to reduce your food expenses
Since her financial overhaul, Jody Allen has written several books on how people can save money on food with a little smart planning.
It might seem hard to believe you can cut your food bill when food prices are rising at a rapid rate (I’m looking at you lettuce), but Ms Allen said there’s still plenty people can do to save money at check out.
“I like to shop and cook really ‘old fashioned’,” she said.
“I usually only buy what my grandmother would have had available, and I don’t waste anything.
“When shopping, try to shop just outside the supermarket and avoid the middle aisles if you can.
“All the bases are outside.
“Buy meat in bulk, shop at local markets, and make basic, but fun food.”
She said it’s also helpful to keep the very cheap basics in mind when shopping.
“Oatmeal is huge in my house. We have it for breakfast, I add it to shakes for the boys, it can be used to crumble chicken and it’s cheap,” she said. declared.
“I really like canned fish like tuna or pink salmon, and bone-in chicken is still reasonably cheap.
“During the winter, I take the slow cooker out and use it daily – cooking things on low and slow – then adding all the little bits that are still good from the fridge to fluff it up.
“We have it for dinner that night – then jaffles the next night, or on a baked potato with cheese the next day.”
Ms Allen also suggested growing fruit and vegetables at home if possible to save money on the trail.
“I have an orchard with lemons, limes, tangerines, peaches, nectarines and avocados,” she said.
“I try to add a new fruit tree a few times a year, but only what we’re actually going to eat.”
Renegotiate your monthly bills
Ms. Allen’s next step in cutting costs for her household was to seek better deals on almost every expense.
“I renegotiated my internet and phone bill,” she said.
“I contacted all my insurers and asked for a better offer or a reduction.
“Unfortunately being loyal doesn’t pay off, and now I spend a whole day every year looking for the best deal and if I change insurance providers I usually get some kind of ‘new customer’ like gift vouchers.
“These go towards birthday or Christmas gifts.”
Now that you’ve seen exactly where your money is going each month, you can make a call to see if you need every subscription you have.
You may realize that you are paying for several subscriptions that you are not looking at.
If you decide to remove them all, you can replace them with free streaming services like ABC iview or other free apps.
Do you have a gym membership that you don’t use? Cancel it and find a free fitness class in your advice area, or enjoy free online videos.
Do you realize that you spend a lot on food delivery services? Delete the app and write a meal plan.
Assess your mortgage
Mortgage broker Maddie Visser said it’s important to look at your existing mortgage to see if you can save money.
“The built-in buffer or floor rate is built into the calculators when assessing your borrowing capacity,” she said.
“This buffer is usually 2.5% higher than your home loan rate.
“It also provides reassurance when rates go up that there is room in your budget to be able to meet repayments.
“Other ways to reduce interest is to store any additional savings in a clearing facility.
“Instead of paying interest on the full loan balance, interest will be charged on the loan balance, less the clearing account balance, using the extra money to move your repayments forward.
“On the other hand, a lot of people have compensation facilities but don’t necessarily use them to their full advantage, so they’re sometimes charged a ‘bundle fee’ or an ‘annual fee’ for a product they don’t have. don’t need .
“Sometimes just reviewing your product and switching to a ‘basic product’ will be a quick way to potentially reduce the interest rate and annual/monthly fees.”
Ms Visser also said it was important to cut up credit cards.
“A lot of my customers have credit cards that they don’t use or don’t use for the right reasons,” she said.
“Closing these credit facilities or reducing limits will not only remove the temptation to spend, but will also increase their borrowing power significantly, as lenders will include the credit limit as an ongoing monthly expense whether you use it or Nope.”
Ask for help if you need
Many people are already living within their means and don’t have much to cut back on.
If you find yourself in this situation, you can contact the National Debt Helpline on 1800 007 007 for free financial advice.
In each state and territory, you can also access food assistance and rental and crisis housing.
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