If you’re trying to work out how to handle the rising cost of living in Australia, then you’re not alone. The cash rate rose from 0.1% to 3.1% in 20221, while inflation continues to rise. People across the country are feeling the pinch following the increased prices of essential goods and services.
However, there are ways you could handle the rising cost of living. Budgeting may help you prioritise your spending and prepare for unexpected costs in the future, while refinancing your home loan may lower your repayments. Proper planning now could prevent nasty surprises down the road.
How can I keep up with the rising cost of living?
1. Explore different energy deals
Do you know if you’re getting the best deal from your energy provider? The cost of energy is rising, so it pays to be informed. Websites like Energy Made Easy could help you compare energy and gas deals so you’re saving as much money as possible.
2. Buy groceries online
Walking into a grocery store can be confronting, especially if you’re shopping on an empty stomach. Shopping online allows you to see exactly how much you’re spending on groceries, while also giving you the chance to take full advantage of the specials. It’s a win-win.
3. Talk to those around you
Managing the rising cost of living doesn’t have to be a solitary experience. Leaning on your community, even just to talk, can help you put things in perspective.
4. Prioritise the things that matter
When times are tough, cutting back on luxury spending can make a big difference. Making the hard decisions now can help you going forward.
5. Get your debt under control
If you have debts that are causing you anxiety, it may be worth considering how you can clear those debts in 2023. Debt consolidation could help you get things under control, especially if you’re dealing with multiple sets of fees and multiple interest rates.
6. Reach out to financial experts
If you want help developing a plan to manage the rising cost of living, then it may be worth speaking to a financial expert. They may help you assess your current financial situation and provide tangible advice to improve things in 2023. If you’re struggling and need to speak with a financial counsellor, you can call the National Debt Helpline on 1800 007 007. They provide financial counselling services at no cost to help you get back on track with your finances.
7. Set a budget
Budgeting might not sound like the most fun idea, but it’s one of the best things you can do to manage the rising cost of living. If you’re looking to learn how you can budget effectively, then read on.
What are some ways to budget effectively?
Creating and sticking to a budget could help you build your savings and make the most of your income. It’s easy to lose sight of your expenses if you’re not tracking them, so budgeting may help you create good financial habits. Some ways you can budget effectively include:
1. Be realistic
Don’t lie to yourself when you’re setting a budget. Setting unrealistic savings goals, or pretending some expenses don’t exist, will only hurt you in the long run. Assess your financial situation and be honest about where you’re currently at (as well as where you’d like to be).
2. Set a spending limit
Feel like you spend too much on non-essentials? Work out how much you can comfortably spend each month and set that as a limit.
3. Calculate your expenses
Bills, groceries, insurance, travel and other expenses can add up each month. Work out how much you spend each month so you can work out what’s left at the end of each month.
4. Set a savings goal
Want to buy a new car, move house or do some renovations? Set yourself a monthly savings goal that you are confident you can meet, so you can work towards your next big purchase/investment.
5. Review your budget every month
Your budget won’t always reflect your financial situation. Review your budget each month and update it with new income/expenses that occur so you’re always on the right track.
6. Account for unexpected expenses
Life happens when you least expect it. Include a buffer for unexpected expenses (like flat tires and home repairs) so you don’t get hit by any surprises.
7. Consider using software to help
Technology could help you budget more effectively. Consider using our budget planner calculator to keep you on track each month.
Is it worth switching banks if I’m looking to earn more on my savings or refinance my home loan?
Switching banks gives you the peace of mind that you’re getting the best deal for yourself. While the cash rate has risen, as has inflation, so too have the interest rates for savings accounts. This means you may be able to get more return on your savings. However, it’s important to read the fine print before you make any financial decisions, as everyone’s financial situation is different.
If you’re looking to make a switch, we offer competitive savings accounts that could help boost the interest that you earn on your savings. Our QSaver is a great option as it offers a competitive interest rate, with $0 account keeping fees, no minimum balance required, and interest is calculated daily and credited to your account on the last day of the calendar month. You can also accumulate Qantas Points* with our Qantas Points Saver while enjoying a competitive interest rate with $0 account keeping fees.
Alternatively, if you’re looking to refinance your home loan, we offer a range of home loans to suit your situation. Whether you’re looking for a low variable interest rate, instant redraw, split home loans or something else, we have a suite of home loan options that may suit your current situation.
It’s important to factor the rising cost of living into your decision-making but remember: there are many things you can do to make the most of the times ahead.
Call us on 1300 747 747 to talk to us about our savings or home loan offerings, which could help you manage the rising cost of living.
References
[1] Cash Rate Target | RBA (https://www.rba.gov.au/statistics/cash-rate/)
Disclaimers
The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.
*Qantas Points accrue in accordance with and subject to the Qantas Points Banking Terms and Conditions. You must be a member of the Qantas Frequent Flyer program to earn and redeem Qantas Points. A joining fee may apply, however, Qudos Bank has arranged to provide Qantas Frequent Flyer membership with the joining fee waived to Qudos Bank members who are not already a Qantas Frequent Flyer member and who apply at qantas.com/joinffqudos. Membership and the earning and redemption of Qantas Points are subject to the terms and conditions of the Qantas Frequent Flyer program available online at qantas.com/terms. This offer is non transferable and not available in conjunction with any other offer. Qantas Frequent Flyer membership and each application is subject to approval by Qantas. Qudos Bank recommends that you seek independent tax advice in respect of the tax consequences (including fringe benefits tax, and goods and services tax and income tax) arising from the use of this product or from participating in the Qantas Frequent Flyer program or from using any of the rewards or other available program facilities.
Normal lending criteria, terms and conditions and fees and charges apply. Mortgage insurance is required for home loans over 80% and is subject to approval.
Interest only subject to approval. During an interest only period, your interest only payments will not reduce your loan balance. This may mean you pay more interest over the life of the loan.
You should read and consider the relevant terms and conditions (available on request) and our Financial Services Guide before deciding whether to obtain any of our financial products or services.
Published February 2023
