After a five month reprieve, the November 2023 interest rate rise may put additional strain on the budgets of many Australians, less than seven weeks out from Christmas.
With the cash rate now sitting at a 12-year high of 4.35% after the first benchmark interest rate rise since June,1 many Aussie households may be looking for ways to save money on everyday expenses such as groceries and utilities.
To help manage your household budget after this month’s rise, we’ve scoured the web and found 8 tips that could help lessen the burden of the current cost of living.
1. Shop smarter at the grocery store
No we don’t mean buying less (we know you have hungry mouths to feed!), but there are ways to help get the best value for money when you fill up your shopping trolley. During your regular shop, consumer advocacy group CHOICE recommends comparing unit prices to help the budget go further,2 switching to home-brand products3 and keeping track of current discounts across the major supermarket chains.4
2. Maximise your leftovers
Not only could adding a ‘leftovers night’ to your weekly meal plan save you money, it might also help reduce food wastage. Going one step further, Melbourne chef Julia Busuttil Nishimura has suggested using veggie scraps to make stock instead of buying it, and also keeping your fridge organised so leftovers are front of mind.5
3. Look for cheaper alternatives
The Federal Government’s Moneysmart website has some suggestions for finding more affordable alternatives to common memberships and subscriptions.6 Instead of a gym membership, they suggest looking for no-cost classes in your local area (such as those run by local councils), cancelling streaming services in favour of free-to-air TV, or trying carpooling or riding your bike instead of taking public transport.
4. Compare utilities
Now might be a good time to see if you can get a better deal on your electricity. The Federal Government’s Energy Made Easy website is a free energy price comparison service for households in New South Wales, Queensland, South Australia, Tasmania and the ACT.7 Victorian Energy Compare offers a similar service for Victorians.8
If you decide to switch, the Australian Energy Regulator advises consumers to consider if the new offer is right for you – for instance, by considering your energy usage, what discounts are available and what you have to do to get them, and by asking if there are any extra fees depending on how you pay your bill.9
5. Think about starting a side hustle
As the cost of living continues to rise, some Australians are turning to side hustles to earn some extra money. A study from Finder found 35% of Aussies report making extra money through selling pre-owned goods or collecting recyclable cans and bottles.10 You could also think outside the box about services you might be able to offer, such as dog walking or house-sitting.11
However, it’s worth noting the money you earn from a side hustle might be classified as income and subject to taxation by the ATO, so the help of a registered tax adviser could be useful here.12
6. Is it time to become a landlord?
It might sound a little extreme but financial adviser, Ben Nash, says moving out of your home and converting it into a rental, then renting another property to live in, could save some homeowners money.13 “When your property is an investment as opposed to your own home, mortgage interest costs and ongoing fees like rates and insurance become tax deductible,” explains Nash.
7. Check for insurance savings
If it’s almost time to renew your insurance policy, check with your insurer to see what options you have to reduce your premium. Youi Head of Product – Vehicle, Marni Jackson, says that around renewal time is a great time to review your policy as a lot can happen in a year.
“It’s worth making sure all of your information is up to date – you might be parking in the garage now instead of on the street, or your teenager may have moved out and no longer drives your car at all,” says Jackson.
“While you’re updating your info, it’s good to run through the policy options and extras you’ve chosen to make sure they’re still relevant and suitable. Whether it’s looking at the Agreed Value versus Market Value, your basic excess, or looking at optional covers, like hire car cover. Removing an optional cover that you no longer need could save you on your premiums.”
8. Peruse petrol price-comparison apps
If you’re looking to save money at the petrol pump, using a fuel price app could help you find a cheaper deal.14 The Australian Competition & Consumer Commission (ACCC) advises motorists to also keep an eye on the petrol price cycle, which may help you understand the best time to fill up.15
It’s a tough time for many mortgage holders right now, so hopefully some of these tips will help you balance incomings with outgoings until interest rates start to fall again – whenever that might be.
The information provided in this article is general in nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice.
Article by guest writer Chelsea Spresser
1 Source: Reserve Bank of Australia – Reserve Bank raises interest rates, average repayments now up more than 50pc since hikes began, 2023
2 Source: CHOICE – Shoppers use unit pricing to combat rising grocery bills, 2023
3 Source: CHOICE – Woolworths vs Coles vs Aldi, 2022
4 Source: CHOICE – Top ways to save money you never thought of, 2023
5 Source: nine.com.au – Melbourne cook's hack to giving life to leftovers will save you time and money, 2023
6 Source: Moneysmart – Simple ways to save money
7 Source: Australian Government – Energy Made Easy
8 Source: Vic Government – Victorian Energy Compare
9 Source: Australian Energy Regulator – Shopping around and changing your electricity or gas offer
10 Source: Finder – Side hustle statistics, 2023
11 Source: Canstar – 25 side hustle ideas in Australia to help you make money, 2023
12 Source: Australian Taxation Office – Making money from a side hustle?
13 Source: news.com.au – Controversial way to save $700 a month on mortgage payments, 2023
14 Source: CHOICE – The best apps for finding cheap fuel, 2022
15 Source: Australian Competition & Consumer Commission – What affects fuel prices