With interest rates rising, Australian mortgage holders have had a sharp jump in their repayments, but there are ways to combat what could add up to thousands of dollars per year.
“After yet another cash rate increase, annual mortgage repayments for many borrowers are almost $10,000 more expensive than they were a few months ago and could climb even higher this year,” said Finder’s head of consumer research Graham Cooke.
To cope with the rising cost of living, Moneysmart recommends recording your income so you know exactly what amount is coming in. If your income isn’t regular it’s advisable that you work out the average amount and period.
Work out your expenses such as your mortgage payments, electricity, gas and phone bills, food and groceries, medical treatment, insurance, transport, debt and miscellaneous costs.
When you’ve worked out those costs you should set a spending limit for your wants, needs and savings.
Most people report they find saving much easier when they have a goal so this could be a helpful way to keep your goals on track.
Canstar says: “One study found that those who did (set goals) were 42 per cent more successful than those who did not. One widely-used rule of thumb for ensuring your goals are effective is to ensure they’re SMART – specific, measurable, achievable, relevant and time-based.”
Michelle Bowes, author of Money Queens agrees and says: “Any savings goal should include clear targets and timeframes.”
Make savings fun again
You can also make savings fun, for example, the 52-week savings challenge where you save $1 in the first week, $2 in the second and so on, or you can roll a dice and so if the dice lands on a five you would save $5, or pick a temperature, so if it’s 25 degrees you may save $25 a week.
Starting a coin jar is an easy way to save and it’s easy to forget about the money that you put away.
See if it’s time to move jobs
We recently reported that you could get a huge sign-on bonus or a higher starting salary if you shop around for a new role. Alternatively, you could see if you can get some extra hours or a pay rise at your existing one.
Reduce your trips to the shops
When it comes to grocery shopping, go just once a week and buy in bulk. Per-unit prices usually are less when you shop this way so you’ll be able to spend less.
Buying in bulk can help because you’ll have enough ingredients so that you have leftovers. The leftovers can be used for future meals.
It’s not the avocados, it’s the coffee
Instead of buying coffee out (which can easily cost $4 or more these days) buy a coffee machine so you can make your quality own coffee at home and save a significant amount of money.
Coffee machines are available for as little as $100 so if you saved $10 a day on coffees as a family, the machine would pay for itself in just a fortnight., or two if you’re living alone.
Save by switching
While it may be tempting to stick with your existing providers, it is in your best interests to check comparison sites such as Finder, Canstar and Comparethemarket to see if you are getting the best deal.
They’ll compare side-by-side the prices of everything from holidays to health insurance, mobile phones to mortgages to see if you can get a better rate than what you’re currently paying.
Cash in with coupons and cash back
Don’t be shy to use coupons, whether online or in store. Coupon code sites are out there in droves and many instantly apply discount codes to what you’ll already be buying, whether it’s new clothes, groceries or larger purchases like appliances.
Cash back sites, like Shopback and Cashrewards work in a similar way to coupon code sites. By clicking through to a website from them, they’ll refund a designated amount back to you. Once you reach their withdrawal threshold, you can get that cash back.
When shopping at big stores like Coles, Woolworths, Kmart or Big W, join programs such as FlyBuys or Everyday Rewards to earn points and rewards that can later be used for purchases.
If you’ve followed all these tips and you’re still struggling with your finances then consider contacting Financial Counselling Australia so you can get some advice specifically tailored for you.