How to claw back some cash as surging living costs bite hard

Inflation’s impact on Australian households has been highlighted by new research, but there are things consumers can do.

Half of Australians say they need at least $100 extra each week to help them cope with the cost-of-living crunch, new research has found.

News Corp Australia’s Financial Health Survey January 2023 has highlighted a sharp rise in financial worries, with a majority of people reporting decreased cash savings during 2022 and food inflation topping the list of money concerns.

Two-thirds are under more financial pressure than this time last year, women have been impacted heavier than men, and the proportion of people experiencing increased money pain has jumped 51 per cent in just 12 months, it found.

However, there are several ways consumers can find or claw back a missing hundred dollars a week or more.

Author and financial adviser Helen Baker says the key areas of money concern for Australians are the rising cost of groceries, petrol, interest rates and insurance.

EVERYTHING GOING UP

The research found 32 per cent of Australians say food prices have had the biggest impact on their cost of living in the past year, followed by 19 per cent for petrol, with rent and mortgages equal third at 14 per cent each.

Financial adviser and author Helen Baker says extra work can generate cash.

“Everything that people are touching as a significant part of their spending has increased,” Baker says.

“Last week at the butcher, for the first time in my life I questioned him and said ‘is that (price) right?’

“We had it good for so long – we got used to low interest rates and good times.”

Baker says people can help combat higher living costs by seeking some extra work, with businesses everywhere trying to hire extra staff.

“Perhaps dedicate three to six months to doing a shift at a cafe or similar,” she says.

Cutting spending is vital too, Baker says, and she has noticed that many people are still spending big – especially on restaurant meals.

“It’s pretty easy to save $100 if you don’t eat out for dinner,” she says.

“Go through your credit card or direct debits and see where you are leaking money – shave some of those down.”

And check you are getting the best possible mortgage deal, Baker says.

CHECK SPENDING

Sort My Money founder David Rankin says rising interest rates have impacted both mortgage repayments and rents, and living costs for many people have jumped more than $100 a week.

“The question is do they need that extra $100, or do they need to look at their current spending?” he says.

“If you have a lot of convenience spending in your budget, it’s a great opportunity to make the savings you need to meet the cost-of-living pressures.”

“Convenience equals costs.”

Rankin says people should spend more money at discount supermarkets and less on takeaway food and bought lunches.

Sort My Money founder David Rankin says cutting convenience food can help control costs.

“Plan your meals for the week – if you are very busy do some bulk meal preparation at the weekend,” he says.

“And when you are going to make a purchase, sleep on it. You may decide the next day that you don’t need it after all.”

News Corp Australia’s survey of more than 1000 people also found women are more worried than men about paying bills and covering housing costs, while men’s concerns focus more on saving for retirement and superannuation.

Rankin says women are more financially stressed because money management responsibilities in many households fall on them.

“Men some of the time can be blissfully ignorant,” he says.

Baker says there is a gender income gap and a “career choice gap” where more women work in lower-paying professions such as childcare and aged care.