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Avoid paying the price for cost of living

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Avoid paying the price for cost of living

Aussies seem to be under financial pressure from all angles but a few simple actions can be a huge help. WORDS: Ingrid Nelson & AAP.

It’s no secret that the past 12 months have been particularly tough for the majority of Australian households. The rising cost of living – including housing, groceries, petrol and utilities – have been steadily climbing, not to mention the significant pressures on household budgets due to several consecutive interest rate rises last year.

Recent reports illustrate that the cost of housing on the Sunshine Coast has risen by 10 per cent over the past year, outpacing wage growth.

Families and individuals have been forced to reassess their budgets and make tough decisions to ensure financial stability in the year ahead.

Furthermore, millions of Australians are currently nursing Christmas debt hangovers, with recent research by Finder revealing that 38 per cent of Australians – equivalent to 7.7 million people – have racked up significant Christmas debt.

But it’s not all bad news.

Surprisingly, lower inflation growth has given mortgage holders renewed hope that interest rates won’t be lifted again in February. The prospect of another interest rate hike in February has become much less likely after inflation fell faster than expected.

The Australian Bureau of Statistics consumer price index for November came in at an annual rate of 4.3 per cent, down from 4.9 per cent in October.

The result was lower than consensus expectations of a 4.4 per cent rise in prices and the lowest monthly readout since the four per cent figure recorded in January 2022.

The surprise outcome will further cement expectations the Reserve Bank will keep the cash rate on hold, with the rates market betting the monetary tightening cycle is already finished.

Treasurer Jim Chalmers welcomes the result but says inflation is still higher than the government would like.

“We are making progress in this fight against inflation, but (it) is not over yet,” he says.

“We know inflation is still the defining challenge in our economy and that is why dealing with these cost-of-living pressures is still the Albanese government’s number-one priority.”

HOW TO MAKE YOUR MONEY WORK FOR YOU

With the Christmas and New Year period now behind us, Queensland Country Bank’s business development manager Tristan Scott says the team also recognises an opportunity to  assist members with some day-to-day budgeting.

It is also a great opportunity for a review of lending needs. The Maroochydore lending office offers appointments with a SmartBudget specialist, where members can create a personal budget, or agreement, to ensure all nominated bills and expenses are in the one place online.

“We have found that many people want to do the right thing and plan to meet their key commitments every month,” Mr Scott says.

“However, they can sometimes just lack the confidence and ability to be organised.

“For many people in their financial lives, getting on top of their budget in the first five to 10 years of their working lives is the key to long-term success.

“Statistics show that those who can grow their knowledge and create the best habits will have a stronger chance of maintaining a positive financial record, saving for a house, breaking the rent cycle, and one day owning their own home.”

Mr Scott says the key benefits of setting up a personal budget include easing bill shock, paying bills on time and potentially saving money.

He says members can set up insurances, rent, mortgage, council rates, electricity, gas, water, phone, internet, loan and credit card payments, car registration, school fees and gym and sporting memberships to be paid from the agreement account.

Mr Scott says a common budgeting mistake is not understanding weekly income versus the average weekly expenditure a person is already committed to: “These errors in judgment can lead to the biggest mistake of all: to waste time (months or years) without moving forward financially, and possibly running into financial trouble by missing a key commitment.”

He says with many households’ mortgage representing their largest ongoing commitment, it is a great time of year to review your home loan rate and ensure its features are working for you. No two situations are the same.

“Some borrowers have the right product and may just need some helpful tips as to how to best maximise the potential of their home loan,” he says.

“Others may be in a product that is just not suitable to their needs.”

TRISTAN SCOTT’S TOP MONEY TIPS

  1. Get informed. There is no shame in admitting that you find this hard. Many people do.
  2. Understand your complete budget. Growing your knowledge creates confidence and a sense of expectation.
  3. Set clear and achievable goals. Understanding your bottom line can help you set quarterly and annual goals.
  4. Make long-term plans. Don’t just focus on the immediate. What would you like to achieve in five years?
  5. Make change today. Don’t ask yourself these same questions in 12 months’ time. If your current method is not working, why stick with the same approach?
  6. Why not get a free second opinion on your home loan? The benefits of dealing with an experienced lender can save you significant dollars over the life of your loan.

For more information, visit queenslandcountry.bank or phone 0438 905 426.

TOP TIPS TO PAY OFF YOUR CHRISTMAS DEBT

  • Trim expenses: Unpack your budget and identify areas where expenses can be cut, whether it’s dining out less, finding affordable entertainment options, or reigning in unnecessary purchases. Small sacrifices now can lead to big savings and a speedier escape from holiday debt.
  • Set a spending limit: Set a spending limit for yourself and avoid non-essential purchases until you’ve successfully cleared your Christmas debt. It’s a practical way to ensure your financial sleigh stays on track throughout the year.
  • Get a balance transfer credit card: Explore the benefits of a balance transfer on your credit card. Moving your holiday debt to a card with a lower or 0 per cent interest rate for an introductory period can help you save on interest charges while paying off what you owe.
  • Consider financial hardship options: If the holiday debt blues persist, consider financial hardship options with your bank or reach out to an independent financial counsellor through the National Debt Helpline at 1800 007 007. Don’t let post-holiday stress linger. Source: finder.com.au

SAVE MORE THAN PENNIES BY SIMPLY SHOPPING AROUND

Australians are losing billions of dollars by sticking with the same utility providers, new research indicates.

Finder crunched the numbers on electricity, mobile and broadband costs and found that Australians paid a collective $4.5 billion in loyalty tax in 2023. That’s a whopping $331 per person.

Mariam Gabaji, tech and utilities expert at Finder, says it’s shocking how many people are missing out on a better deal.

“The soaring cost of living is forcing Aussies to fork out more money on almost everything – including energy, mobile and broadband. These are all utilities you can’t do without.

“But that doesn’t mean you should be stuck paying more than you need to.”

Finder’s analysis shows that on average, Aussies are paying over $1.2 billion in loyalty tax for NBN, $1.1 billion for electricity, and $2.2 billion for mobile data.

Ms Gabaji says most Aussies could be getting much better bang for their buck by shopping around.

“Providers really want your business: for example, some energy companies are offering $150 in credit or up to 15,000 Qantas points.

“If you haven’t switched utility providers – be it electricity, internet, or phone – in the last 12 months, you’re probably paying too much.”

A separate Finder survey found 14 per cent of Australians – equivalent to 2.8 million people – admit they have no clue when a bill is about to arrive.

Ms Gabaji urges Australians to track their bills and regain control of their money.

“Call up lenders, utility companies and any other providers you are a customer with and request a due date change so your bills line up with your pay day.

“Then set up direct debits so the bills are paid on time and in full.

“The new year is a great time to get in the driver’s seat of your money matters and implement some better financial habits,” she says.

 

STRETCHING YOUR GROCERY DOLLAR FURTHER

From fresh fruit and vegetables, to meat and regular pantry items, the steady increase in food prices has become a growing concern for Australians, prompting us to tighten our belts even further when it comes to budgeting for groceries. Local author of the very successful 4 Ingredients cookbook range, Kim McCosker says we can drastically reduce our food waste and make our budget stretch further by being more proactive when it comes to menu planning.

In fact, Kim has written a book highlighting the importance of knowing what you want to buy before you go to the shops and planning ahead to save time and money in the kitchen.

“I cannot stress enough the importance of sitting down each week and creating a simple menu,” Kim says.

“My aim with the book Menu Planning was to create a ‘kitchen bible’ that simplified this task.

“I’ve split a week into days and attributed names to each day, keeping it super practical: Meatless Monday, Meals in Minutes Tuesday, Easy Freezy Wednesday, Thrifty Thursday and so forth. Each chapter has several quick, easy and delicious recipes that fit those themes.

“For example, on Monday we’ll have an Eggplant and Sweet Potato Curry, Tuesday a Tray Bake Chicken, Wednesday a Shepherd’s Pie etc. Then, extracting from that list the ingredients you don’t have in your pantry or fridge and simply shopping for the ones you need. We don’t plan to fail, we often just fail to plan.”

We have five signed copies of Menu Planning to give away. Head to our win page to enter.

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Ingrid Nelson is the Co Editor of My Weekly Preview and a journalist with more than 20 years’ experience.

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