How to save money and ride out rising inflation and rising interest rates
- Written by: Tess Sanders Lazarus
The rising cost of petrol is causing whiplash amongst Aussies right around the country. The war in Ukraine and the economic fallout caused by Covid-19 have hit our purse strings really hard. More than ever, Aussies are looking for ways to save some money and to get through the rising inflation as well as rising interest rates. The cost of living has soared and people are really starting to feel the pinch – but further pain is on its way and people need to be prepared.
“When people talk about the cost of living, they are measuring how much money it takes to buy necessary items. The cost of living has a huge impact on one’s personal finances because it measures how well you are able to afford these costs,” Dean Hartmann said.
Dean Hartmann is a highly respected money enthusiast, investor and mentor who has assisted many people over the years through his insights and thought leadership.
“In 2022, the largest expenses for Aussies will be housing costs, petrol prices and groceries. So long as wages grow, then any hike in prices of consumer goods won’t hurt. The problem is when you don’t get the increase in wages,” Hartmann said.
“In the meantime, data from the Australian Bureau of Statistics showed that the seasonally adjusted Wage Price Index (WPI) rose just 0.7 percent in the March 2022 quarter. So how do you save money in an economic climate like this when it seems like the odds are stacked against you?
“I have put together some simple ideas to get you started.”
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Save on groceries
“The average Australian household spends $153 on groceries per week, according to Canstar Blue’s 2021 survey. When it comes to grocery shopping, it’s not so much saving as it is being smarter about how you shop,” Hartmann said.
“Meal planning is not very fun to do; however, if you make a habit of it, and plan your meals, starting by using up items that are already in your pantry and freezer, and then using the supermarket catalogues to find the weekly specials, you’ll be way ahead in no time.
“Also try to cut down on impulse purchases that you don’t need and buy generic brand products. You might even find that doing your groceries online might help you. Research shows that shoppers are less inclined to make impulse purchases when they shop online.”
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Spend extra income wisely
“We are coming up to the end of the financial year soon. If you think that you will be receiving a sizeable bonus or tax refund, plan in advance how to use it wisely,” Hartmann said.
“It would be better if you paid off some debts or put some away in a savings account. As soon as you lower your credit card debt, your interest repayments will drop. And once you have cleared your debt, you’re no longer servicing the bank’s profits. Paying down debt is critical in times like these.”
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Reduce your bills by shopping around
“Besides doing little things such as taking shorter showers or not blasting the heater at a temperature that is too high, it would benefit you to check around with your utilities providers to make sure you’re getting the best deal possible,” Hartmann said.
“This is important for other expenses such as personal health premiums, insurance, even internet and mobile phone providers. In general, the more research you do, the more you stand to save.
“Before you buy something, think whether you can borrow it or buy it second hand, or get it cheaper elsewhere or with a voucher. Want to buy a new book? Get it from the library instead. Want a go out for a meal? Which café is running a two for one parma night? Fix something that’s broken rather than just throwing it away.”
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Eat at home
“There is a special term called ‘lunchflation’, which is the cost of dining out. It can come as a bit of a shock, but the average price of a lunch time sandwich has gone up 28 percent on average. The average price of sushi is up 27 percent, while burger prices are 14 percent higher than they were last year,” Hartmann said.
“Supply chain issues due to Covid have really driven prices up everywhere, so by making it a daily habit of packing your lunch instead of buying lunch a few times a week can really make a difference to your household accounts.”
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Shopping freeze
“Without giving a name to it, many people naturally go into a shopping freeze in January, after the huge expenses of the festive season. A shopping freeze is when you set aside a time period in which you commit yourself to only spending money that is necessary—your bills, groceries and medical expenses,” Hartmann said.
“While it can be really hard to commit to a shopping freeze, the best way to look at it is to focus on why you’re doing it, rather than what you’re doing. If you commit to a shopping freeze, you will more than likely amaze yourself by just how resourceful you can really be.
“Similar to how we all got used to lockdown life by finding ways to fill up the long hours of a day, you can train yourself to be more resourceful and more disciplined in your spending habits.”
Setting goals for the future
“We are now into our third year of Covid-19. The focus has now shifted from the virus itself to the ramifications that the strains of the supply chain have caused. This is further intensified by the uncertainty caused by war in the Ukraine. For the average person, the top stressors are currently the rising cost of living, as cited by 87 percent of respondents surveyed. Financial stress can result in poor mental health. Setting short term financial goals can be really useful in helping you get the motivation you need so that you can eventually set some long-term goals for yourself too,” Hartmann said.
About Dean Hartmann
Dean Hartmann is a highly respected money enthusiast, mentor, speaker and business growth strategist who has helped many people and businesses to develop and implement strategies for growth.
Daily Bulletin
