In the lead up to the Federal Election, one phrase keeps coming up again and again in political speeches and media reports: ‘cost of living pressures’. But are Australians really facing rising costs of living or is this a phrase thrown around to win our vote?
Of course, there are always pockets of people who feel the pinch more than others, and we can’t ignore that there are plenty of Australians living below the poverty line, but generally speaking, we are living in very prosperous times. For many Australians, it’s true that we’ve never had it better.
And while it’s true that there has been a slow-down in wage growth, at the same time, inflation has been relatively low. According to figures from the Australian Bureau of Statistics (ABS), inflation has grown by 9.7% since 2013, and household wages by 7.8% – yes, there is a difference, but, in my opinion, one that most households won’t feel.
In late 2018, the ABS also took a look at how Australians spend their money, and while we hear a lot about how utilities are becoming unaffordable, it might surprise you to note that the average household spends more money on takeaway food than electricity.
Regardless of whether a general rise in the cost of living is fact or fiction, the reality is most of us want to save more money than we currently are. So, if you are personally feeling the pressure of rising expenses, it might be time to take action.
The three biggest household expenses across the board are housing (including utilities), food, and transport, so here are some of my tips to save money in these key areas.
Understand your expenses
Today, when you can pay with the wave of a card or even your mobile phone, it’s easier than ever before for small costs to accumulate without you noticing. Review where your money has gone for the past month, and you might be surprised – takeaway meals, dinners out and impulse purchases might be costing you hundreds, if not thousands. If you do find yourself surprised at the outcome, it might be worth investing in an app that tracks your spending so you don’t have to, like BeApt.
Ask for a better deal
If you own your home, pick up the phone and ring your home loan provider to ask for a better deal and you just might find that you get one. This applies to your insurances, utilities, internet provider and basically every regular bill you have. Making these phone calls could save you thousands each year, and all it will cost you is a little time (and maybe some sanity, waiting on hold!) At the end of the day, remember, if you don’t ask, you definitely won’t get.
Keep the car for longer
If your car is still roadworthy, ask yourself why you’re replacing it before you buy a new one. While there are many arguments about reducing ongoing maintenance costs and fuel efficiencies etc., the reality is that a new car is rarely a good idea financially.
Plan ahead
Australians waste billions of dollars’ worth of food each year and most of us, if we are honest, could attest to throwing out a fair amount of food whenever we clean out the fridge. Planning ahead for your meals and buying only the amount of food you need is not only better for the environment but can save you thousands of dollars a year. And planning ahead can save you in many areas; for example, some companies offer discounts for when, and even how, you pay your bills.
The bottom line is that most of us can find a little extra to put away if we are prepared to invest a little time and see how small savings can accumulate quickly. It can also be worth getting financial advice to help you stay on track with your goals. Knowing what you are saving towards and having a clear plan to get you there can often help.
Remember, whether you are at that time in life when you want to save for your dream retirement or just starting out and looking to get a foot on the property ladder; when it comes to reaching your financial goals, the worst thing you can do is nothing – it just might be time to stop thinking, and start planning.
General Advice warning
The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.
