How to save money – Forbes Advisor Australia

The cost of living in Australia is rising, putting Australians under financial pressure. Here are some easy ways to save money.

The prices of groceries, gas, insurance, rent and buying a property have all risen over the past year or two, but in recent months the impact has started to hit home.

Inflation in Australia has reached levels not seen in decades, hitting an annual rate of 6.1% and tipping over to over 7% by the end of the year, prompting the RBA to embark on a series of aggressive rate hikes. It’s estimated that on average, a person with an $800,000 mortgage will be making more than $1,000 a month in repayments than they were doing as recently as April this year.

A key theme was the spate of crises hitting the nation at once – from the spread of Covid-19 and the impact of lockdowns, the war in Ukraine, the global supply chain crisis, and droughts and floods. This has led to increased prices at the grocery store — who can forget the sight of $10 iceberg lettuce in many cities — and rising fuel prices. The price of fuel is expected to rise by a further 22 cents per liter when the fuel consumption tax cut ends at the end of the month.

As Australians across the country grapple with these higher living costs, the country’s food banks are reporting exceptional demand, with some people waiting three hours for grocery baskets.

The only way to cope with the increasing demand is to look for cost-cutting opportunities as soon as possible. While getting started can be difficult, the reality is that we all need to cut back on our spending and save as much as we can.

Know your expenses

The first step to saving money is to understand how much you spend and what are necessary expenses and what are not.

That means every household item needs to be accounted for, so pull out your bank statement for the last few months and start breaking down your expenses into a simple spreadsheet.

This data will help you categorize your numbers and give you a monthly total. Make sure you’ve accounted for everything, such as: B. Annual expenses like insurance and car maintenance so you can clearly see what you have left at the end of each month.

Next, think about what you can eliminate and where you can reduce your spending. Identify unnecessary costs, such as B. Dining out, unnecessary subscriptions and other recurring charges that need to be canceled, and even entertainment expenses.

Facing the numbers and taking control that way can be daunting at first, but can feel enormously liberating in the end.

Conduct a financial audit

If you have multiple debts, combining them into one monthly payment may be a good option for you. The debt is transferred into one loan so that you can make a one-off repayment.

Next, look at what you pay in bank fees and credit card fees, which can vary significantly depending on the provider. So get out the bank statements and really understand what your bank is charging you.

There’s a lot to be said for just calling your bank and asking for a better deal when it comes to these fees.

While you’re at it, call your bank and ask about a discount on the interest rate on your home loan, too. First, compare what you’re paying with other lenders so you have the information on hand to ask for a better deal.

Notably, many banks are stepping up the front and calling on mortgage holders to offer them a lower interest rate before they have a chance to refinance. So take advantage of that desire to keep your business and push for a 0.5% reduction on your loan (and ask them to waive fees. You can do that). The key here is to be willing to go to another lender if there’s a much better offer on the table that your bank can’t match.

Of course, making sure you pay off your credit card in full is the best way to avoid interest charges.

Also, look around at your insurance policy to see if you can get a better deal elsewhere, but make sure you compare apples to apples when comparing policies. Many consumers end up paying what’s known as a “loyalty tax,” where they overpay for traditional insurance because they don’t shop around every year and thus miss out on lower introductory rates for new customers.

Reduce your grocery bills

Getting rid of the fat from your grocery store can make a world of difference, with everyday Australians sharing tips on how to cut your bill to $150 a week for a family of four.

Start planning ahead. Decide what your weekly meals will be, including lunch and snacks, and write a grocery list so you don’t get distracted at the grocery store.

Look for special offers and switch to house brands and switch some of the staples over to frozen vegetables, which end up being much cheaper to buy than fresh. Also keep an eye out for local weekly veg boxes stocked with local produce, like Good & Fugly, which curates a weekly produce crate of fruit and veg deemed “cosmetically unsuitable” for supermarkets and sends it direct to consumers in Melbourne and Sydney delivers.

Eliminating some meat from your diet, shopping in bulk, going to the local farmer’s market, and growing a few of the basics in your own backyard can also help lower your weekly grocery bill. Also, cut down to one grocery store per week instead of going in every day.

Reconsider your household bills

Running a home can be very expensive over the course of a month, so look for ways to reduce your bills and electricity consumption.

Only run your washing machine when you have a full load to wash and use cold water. Also, only heat and cool the space you use, not the entire house. You can save on costs by simply closing the blinds to block out the morning sun, or by making sure your heat doesn’t escape through the open laundry window.

Turn off your appliances when they’re not in use and wait until just before bed to turn on your dishwasher to avoid paying for energy peaks.

Make sure you’re signed up for the cheapest deal. The federal government offers free tools and resources to help consumers compare plans. Since every state is different, they also offer state-specific resources to help you choose the best deal. It may take a few minutes of your time but can save you hundreds of dollars.

For example, it is estimated that those who used the Victorian Government’s Victorian Energy Compare website were able to save $330 in the first year alone by switching to a cheaper offer.

Switch to cheaper options

You can also switch and save in areas other than utilities. From the brand of milk you buy to the hair salon you frequent, there are a number of simple switches you can make to reduce your expenses.

First, look at the streaming services you use and see if you could narrow them down to one. While you’re at it, decide whether to live without your gym membership and replace it with free classes, or commit to a regular walk with a friend instead. In addition, you can cancel subscriptions that you no longer use but have forgotten.

Other ways to switch to cheaper options include stopping all food delivery services, cycling instead of public transport, vacationing closer to where you live, using discounts or coupons when eating out, and having more entertainment at home.

Work your way through each expense and look for ways to cut costs. And if you’re tempted by unnecessary purchases, wait a few days and see if you still want to make the purchase.

Work smarter, not harder, in the kitchen

Meal prep has taken off in Australia and social media and bloggers are offering tips on how to get started. Preparing your meals in advance allows you to buy in bulk once a week, making mealtime a lot easier.

If meal prep isn’t for you, at least make a commitment to using your leftovers and helping reduce the 7.6 million tons of food lost or wasted every year. According to Foodbank, 70% of these foods are still perfectly edible.

So get out that cookbook and start looking for ways to reinvent your leftovers and turn them into the starting point for tomorrow night’s dinner, or take them to work for lunch the next day.

Other kitchen tips include clearing out the pantry to ensure nothing hits its sell-by date before you can use it, buying in bulk to save, and cooking items like Bolognese sauce and pizza crusts in bulk for freezing.

Also, skip the daily coffee purchases and instead have a caffeine hit at home or in the office, which at $5 a day could save you more than $1000 a year.

when you are there financial problemsYou can access free advice by calling the National Debt Hotline at 1800.007.007.