From groceries and petrol to electricity bills and mortgages, the cost of living has risen and many Australians are struggling to stay ahead.
We’ve brought together three professionals from the business, food and finance sectors to offer you their tips.
In our Q&A blog, ABC business reporter Emily Stewart, author of four books on saving money and frugal living Jody Allen, and Lody Stewart of Financial Counseling Australia answered your questions about budgeting and saving.
Here are the blog’s biggest takeaways.
When you get paid, split your money into separate “buckets”
A handful of you said that when money hits your bank accounts, you tend to spend it right away.
So how can you change that?
Ms. Stewart says it’s all about separation.
“If you have money set aside for groceries, each time you get paid, put that money in a separate low- or no-fee bank account that has a debit card.”
She recommends writing the words “groceries only” in bold on this map, to remind you what it is for.
“You should check every now and then to make sure you’re putting enough in your grocery ‘bucket’,” she said.
Unrealistic deadlines and limiting fun are budgeting mistakes
An audience member asked what budget-related mistakes have experts seen people make?
Ms. Stewart says the three most common mistakes are:
1. Having an unrealistic budget that is bound to be difficult to achieve
For example, saving $8,000 by the end of six months.
Not only are budgeting goals like this vague, but they can be unrealistic and difficult to achieve given the changing pace of the *wild moves* of everything.
Your own situation will never be the same as that of others.
make sure consider your personal lifestyle, values and financial goals when developing a budget.
2. Having a budget that takes too long to track and maintain
As mentioned above, Ms. Stewart says “bucketing” is a solution to this.
Each time you get paid, set aside money in a separate account that you will need for regular bill payments, such as rent, phone, health insurance, etc. You should also set up automatic payments for these.
3. Not budgeting for a little fun
Ms Stewart says people should accept that they are likely to splurge from time to time, and that’s okay.
Whether it’s going out for a meal or shopping for clothes, your budget has to accept it, while putting a limit on it.
“I cap mine at 10% of my net weekly income, which isn’t a lot but it works for me,” she said.
Set the AC to 18-20 degrees Celsius in the winter and turn off the consoles to save energy
Ms. Stewart says there are many ways to reduce your energy consumption:
- Set your air conditioner temperature to 18-20 degree celsius in winter
- Turn off computers and game consoles on the wall when you’re not using them
- Switch to energy-saving LED lighting. Some state and territory governments offer discounted energy-efficient lighting to tenants, but you’ll need to check with your landlord.
- Whether you can, replace old inefficient appliances with new energy-efficient ones. Your state or territory government may offer a discount or rebate if you do
- Check that you are on the best plan and that you receive all the energy rebates and concessions to which you are entitled from the government of your state or territory
Save on groceries with unit pricing and regeneration of purchased vegetables
Many of you wanted to know how to save on groceries, especially when you are on a vegetarian diet.
Stewart suggested a unit price. It’s not as scary as it sounds.
“Price per unit is a great way to compare different brands but also different sizes,” she said.
Stewart says larger sizes tend to be cheaper, so you can buy staples like rice or flour in bulk. For the rest, you can opt for smaller units.
Ms Allen also recommended “repulsive” vegetables you’ve already bought.
“Spring onions, potatoes, and celery can all regrow fairly easily,” she said.
Start saving by setting aside 10% of your salary
An audience member told us that she had just started her first full-time job and wasn’t sure what percentage of her salary she should save.
Ms. Stewart suggested starting with 10%.
“You can always build it from there,” she said.
“It’s an option when you don’t know where to start.”
Are you struggling to manage your debts? Consider Consolidation or Partial Waiver
An audience member told us he had $78,000 in unsecured debt.
Although they have financial hardship arrangements in place, they have to end, which leaves them struggling to make repayments.
Ms Stewart says the options available to people in this situation depend on who is their lender and their personal situation. They understand:
- A variation of long-term hardship in which repayments are permanently reduced and no additional (or reduced) interest, fees, and charges are added
- Partial debt relief or reduction and affordable repayments so you can repay the reduced debt within a reasonable time frame
- Debt consolidation, for example, a personal loan, credit card and home loan so that your total repayments are lower
- A combination of these and other measures