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How to get past price hikes

Analaura Luna

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The cost of living in Australia just keeps going up and up – and many families are starting to feel the heat. Read on for some great tips to take the ‘sting’ out of living in the Sunburnt Country!

Everyone loves Australia – we’ve got the Harbour Bridge, the Opera House, the Great Barrier Reef, Uluru and Hugh Jackman … but all of these great things come at a cost and the reality is that the cost of living in Australia is getting higher and higher all the time.

With the start of the new financial year came more bad news on the money front with increases to the cost of many basic necessities coming into play. With many people already struggling with budgets pushed to their limit, this latest swathe of increases could cause major financial stress for many households.

The things that are increasing in cost vary from state to state, but it’s electricity that could have the most powerful impact on families: in NSW, electricity prices are skyrocketing by up to 18.1 per cent, far outstripping the 3.3 per cent inflation rate. QLD’s power is set to jump by 6.6 per cent, and WA residents are facing a 5 per cent hike, which comes on the back of the 45.6 per cent increase to the cost of electricity since 2009. And the rest of the states aren’t faring much better.

So what does this mean for you? Well, increasing expenses are putting a lot of pressure on Aussie families. Many households are facing housing stress and fuel poverty – meaning that paying off the home loan or rent is taking up more than 35 per cent of a family’s income and that they can’t afford to adequately heat their homes – and some are unable to pay for basic goods and services. At this point any increases to household expenses, even relatively small ones, could be enough to push many people into dire financial straits.

It’s something many families are concerned about: according to the most recent Suncorp Life Confidence Index, one in four Aussies – including 42 per cent of young families – are not confident that they would be able to cope with further increases to the cost of living.

But while you can’t control the economy or average price rises, there are still steps you can take to reduce your costs and secure your family for the future. Try these simple steps to keep the cost of living from getting you down.

Compare to save
Electricity, telephones, internet, insurance … when you put them all together, household costs can really add up, but they can also be the easiest to reduce. Ever-increasing prices have bred a new generation of online comparison sites, so hit the net to get the best deals and find out how to work them to your advantage. Finding out when your off-peak electricity times are, and whether your phone company allows you to make cheap calls at certain times or free calls to others using the same company can save you a bundle.

Think big
Get real traction by reducing the biggest expenses. Downsizing your home could be a good option: smaller homes can cost less to live in and run, and getting some good mortgage advice could help you reduce your repayments even further. Also, take a long hard look at the contents of your garage. Getting rid of the second car (or the first one!) can save you thousands of dollars a year.

Establish an emergency fund
Not having savings to fall back on is the financial equivalent of not wearing a seatbelt – if something unexpected hits you, you’re in big trouble. Set a manageable amount aside for your savings and commit to depositing it into a high-interest account each week to cover any unexpected expenses – even if it’s just $10 a week, it all adds up. Aim to have three months’ worth of expenses put by – it’s enough to give you a bit of breathing space and you’ll be surprised at how quickly it will add up!

There’s no denying it: being an Aussie can be an expensive business! And while increasing expenses are no fun, they do give us the incentive we need to make sure we’re getting the most for our money. And (along with the beach and the sunshine) that’s something else Aussies love – big savings!

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Tags: cost of living in Australia, increasing expenses, mortgage advice, 30 day challenge

Author's Biography

Analaura Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.