Cost of living: how much can you really cut back on?

The past few years have seen dramatic economic changes. Petrol prices fell during the height of COVID, as we locked down and stayed at home. Prices are on the rise once again as the Government cuts back on temporary fuel excise relief. We faced shortages on supermarket shelves; now we’re experiencing grocery price increases.

Many of us became savers during COVID, but it seems like all that hard work is being eroded by the increased cost of living. Even if we’re prudent and avoid splurging, there’s less money in the bank.

So, what can we do to tackle this? There’s no one-size-fits-all answer. As we fork out more for the usual things, we end up with less savings and less of a buffer for emergencies. We might look for ways to cut back, sometimes on things we might need in the future, like health insurance or medical appointments.

Here are some things you can investigate to possibly help ease the financial strain:

• Shop around for utilities. Currently there are rebates available across different states. For example, in Victoria you can receive $250 by registering your details with the Energy Compare site and comparing energy providers.
• Contact your home loan provider and ask if they can give you a better deal. If not, shop around for a better rate.
• Plan your meals for the week based on supermarket specials and shop for fresh fruit and veg that’s in season. Figure out the best time to shop to find discounted perishables and stock up the freezer.
• Shop in your cupboards: use up all those random items hiding at the back of the pantry and wear those clothes you forgot you had.
• Turn off appliances at the wall when they’re not being used, particularly if they’re older appliances. Look at some ways to cut back on energy use here. Additionally, check the peak and off-peak times for gas and electricity usage, and try to use washing machines, dryers and dishwashers during off-peak times.
• If you have a wood heater, look online on places like Facebook Marketplace for people trying to get rid of unwanted wood – often for free.
• Consider switching to a pre-paid mobile plan when your contract ends and keep your handset (these can often be cheaper, depending on how much data you need). If you work from home a lot and have wi-fi, you don’t necessarily need to pay for an excessive phone data plan, especially if the data rolls over month to month.
• Walk or bike anywhere you can. Bonus: you’ll improve your physical and mental health.
• If your car is old and not worth much, consider switching from a full comprehensive insurance to third party (this covers you if you damage someone else’s car, but not any damage to yours).
• Research savings accounts to see if you can find one with a good rate (this is one plus side to rising interest rates).
• Look at sites like MotorMouth to find the cheapest petrol in your area. You could also increase the fuel economy of your car by:
  • ensuring that your tyres are properly inflated
  • decreasing the weight your car carries (like extra things stored in the boot)
  • combining all of your errands into one route/drive
  • turning off the AC when possible

One thing we can agree on: simply cutting out Netflix isn’t miraculously going to solve anyone’s financial challenges. Unless you have a lot of streaming subscriptions, cutting back won’t make much of a dent. There’s also something to be said for setting aside at least a modest amount for things that make you happy, keep you entertained or provide a welcome escape!

We don’t suggest there are miracle solutions, and we know everyone’s circumstances are different. Instead, we encourage you to take some time to learn about financial topics, like budgeting or home loans; you might work out what you need to do to ease some of the financial strain, if this applies to you.

General advice disclaimer

The information contained in this document is provided for education purposes only. It has been prepared without taking into account your particular financial needs, circumstances or objectives. You should consider the appropriateness of the information as it relates to you. You may wish to consult an adviser before you make any decisions relating to your financial affairs.