Many Australian families are beginning to feel the pinch of the RBA’s rate hikes and rising costs of living, with Finder data from February suggesting more than one in eight homeowners have missed a monthly mortgage repayment in the past six months.

The most concerning impact of these continual interest rate rises is the stress placed on parents to pay the bills, afford groceries, and maintain a decent standard of living as budgets contract and the cost of living continues to increase. Families now more than ever need to be prudent and pay close attention to their finances. As both a dad and a mortgage expert, I’ve put together a list of simple tips the average Aussie family can use to save money and combat the rising costs of living.

The first step to saving more money is to create a budget. You can use budgeting apps that categorize your spending so you can see where you’re spending the most money and where you can trim expenses, like any subscriptions you’re not using. Categorize your goals as either “needs” or “wants.” “Needs” are non-negotiable living expenses, while “wants” are things you can live without. Keep a virtual spreadsheet or calendar to visualize your expenses and track what’s coming in and out of your bank account. You may also want to add birthdays, anniversaries, or celebrations where additional spending (for example gifts) will need to be factored into the budget.

Start by analysing your expenses and creating a budget. Use budgeting apps that categorise your spending to visualise where you’re spending the most money and where you can cut back. Prioritise your financial goals and categorise them as either a ‘need’ or a ‘want’. Needs” are non-negotiable living expenses, while “wants” are things you can live without.

Use virtual spreadsheets or calendars to help you map out your spending, track upcoming payments, and avoid any surprises.

Tip: Consider setting up a free Google account and forwarding emails with upcoming bills and invoices to ensure you keep track of all your bills and payments in one place- regardless of whether you’re using a phone, laptop, or tablet.

If you still like to receive your bills via mail, mark those due dates on a physical calendar and keep it in plain sight in a place like on the fridge or by the kitchen bench.

Review your monthly bills and subscriptions to determine which ones you can do without. You may even notice you’re paying for subscriptions you’re not even using, or one of the kids has signed up for by accident. Almost every streaming subscription service increased its prices last year, so it might be time to consider whether you really need three different channels to keep up with the Kardashians. Cancel any subscriptions or memberships that you don’t need or use, or try this little hack to get a discount:

If there are services that are important to the family, head to the ‘cancel subscription’ page or get in touch with a representative and let them know you’re thinking of cancelling. Most services will offer discounts or incentives in order to persuade you to stay.

We might be in the digital age, but don’t forget about the free community resources like libraries, parks, and museums to provide alternative sources of entertainment. You could even consider spending the weekend building a Street Library with the kids to share books with your neighbours.

Tip: Consider how you’re paying for goods and services. If you’re paying by card, you’re likely incurring a surcharge of anywhere between 0.5% to 2% of a transaction. That builds up over time and can cost you hundreds, if not thousands of dollars each year. Where possible, opt for account-to-account bank payments like direct debits to avoid those fees. Now is not the time to increase your reliance on credit.

Buying groceries and household items in bulk or switching to ‘home-brand’ alternatives can save you money over time. When there’s a sale on staple items like rice, tissues, toilet paper, and foods with long shelf lives, it doesn’t hurt to stock up.

You might consider getting a Costco membership, or if the $60 fee isn’t in your budget, ask a friend with a membership to purchase a Shop Card on your behalf, so you can shop without signing up.

To save on your grocery bill, consider opting for home-brand items that can be just as good as their more expensive counterparts. Many brands share factories for similar products, so the quality is likely to be similar or identical. However, as many parents know, kids can get attached to their favourite brands (who doesn’t like the Cocopops monkey?) and might not like this idea. To avoid this happening, you could store items in reusable containers, preventing your kids from associating the food with a brand.

Tip: Keep boxes of your children’s favourite cereals on hand and swap the home-brand contents into the name-brand box or store such items in reusable containers.

With interest rates on the rise, if you’re a homeowner, your mortgage is likely to be your biggest growing expense right now. It might be time to shop around or speak to a broker about lenders offering competitive rates or lower fees to ensure that you are getting the best deal possible. There are broader options than the Big 4, so you may want to consider a digital non-bank lender to get a better deal.

With everything becoming more expensive, consider switching to an interest-only loan if you are struggling to meet your repayments. This will reduce your monthly repayments and can help ride out the storm until rates start to stabilise and begin to come down again.

Finally, consider using your offset account to reduce the amount of interest you pay on your mortgage. An offset account is a savings account that is linked to your mortgage, and the balance in the account is used to offset the amount of interest you owe on your mortgage. This can help you save a significant amount of money over the life of the loan, especially if you keep a large balance in your offset account.

Refinancing your mortgage, making extra payments, switching to an interest-only loan, and using an offset account are all effective ways to reduce your mortgage repayments and save money over the life of the loan. As always, it’s important to speak with a financial advisor to determine which strategy is best for your individual circumstances.

During times of financial difficulty, it’s easy to get caught up in saving money and not spending any on enjoyment purposes. Don’t beat yourself up- everyone is feeling the pinch! While cutting costs is important, it’s okay to indulge every now and then on little pleasures, like a toy your child wants for their birthday or a coffee on a Saturday morning. Review your budget regularly and make changes when necessary

Remember, the aim of budgeting is to reduce financial pressure by optimising how much cash you have at the end of the month- not to create additional stress, so ensure your budget still allows you enough wiggle room to live comfortably, but frugally enough to get through this period of economic contraction in one piece.

Full Article: Kiddipedia