Feeling the pinch when paying for groceries, petrol or bills? Our experts have joined us to reveal the best tips for budgeting and saving.
Look back on the penny pinching tips and tricks in our blog.
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By Shiloh Payne
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
By Nicholas McElroy
That's all from the personal finance blog today
Thanks for following along. And a massive thanks to our personal finance experts Jody Allen, Emily Stewart and Lody Stewart.
If this blog raised any issues, you can contact these resources:
- National Debt Helpline: 1800 007 007
- Mob Strong Debt Help: 1800 808 488
- ASIC's Moneysmart website
- Australian Financial Complaints Authority
- Find a financial counsellor
- Lifeline: 13 11 14
- Beyond Blue: 1300 224 636
By Shiloh Payne
Managing debt through tough times
David Wright says:
Advice on debts if you can't pay them. 1 year ago I had to stop working due to a rare neurological condition. I have income support through my superannuation however my income has dropped by $70,000. I have $78,000 of unsecured debt and have financial hardship arrangements in place, but they are due to end and I cannot make the debt repayments.
Here's Lody Stewart:
Hi David. I'm sorry to hear about your health and your financial struggles. You've been through a lot and if you can't afford to return to making the normal repayments on your unsecured debts then you may have other options.
The type of options which may be available to you will depend on who your lender is and your personal situation. Options may include:
- a long term hardship variation whereby the repayments are permanently reduced and no further (or reduced) interest , fees and charges are added
- a partial waiver, or debt reduction, and affordable repayments so you can repay the reduced debt in a reasonable amount of time
- Consolidating debt for example: personal loan, credit card and home loan so that your total repayments are lower
- A combination of these and other measures.
The best I can tell you right now is to make an appointment to see a free financial counsellor, as soon as you can before your hardship arrangements end. A financial counsellor can give you more personalised advice and help you with your debts and negotiate a suitable option for you with your creditors.
By Shiloh Payne
The art of comparing
Julie Rayner asks how you can easily compare electricity and gas prices.
"I have tried to do this, and it's very hard to ensure you are getting the best deal you can," Ms Rayner says.
Here's Emily Stewart's take:
Hi Julie. I’m excited to answer this question because I recently did an electricity comparison myself and managed to save $320 on my yearly bill! The good news is that there are a couple of government run websites where you can compare all the gas and electricity suppliers in your area. Energymadeeasy.gov.au covers NSW, south east Qld, SA, Tas and the ACT. Compare.energy.vic.gov.au is for Victorians (who also get a $250 power saving bonus for doing the comparison). If you live in WA and NT there are unfortunately fewer options for providers.
By Nicholas McElroy
Obsessed with automatic transfers
Not sure if it's beneficial for others, but I calculate (with a small margin) all my big expenses that are fixed for the year: Car insurance and rego, home and contents, rates, etc and divide that up by my fortnightly pay cycle. Then have automatic transfers that move the ammounts into set accounts the day after I'm paid. I do the same for other things like my phone, internet and utilities, car loan and mortgage repayments, though these are not annual costs and are set up based on their frequency or estimated cost (utilities) This means I basically have only 'a little' bit left over, but it's all play money because I know all my bills, groceries etc are covered
- Obsessed with automatic transfers
Here's another (very organised) reader comment.
By Shiloh Payne
And don't forget energy bills
They're on the rise too.
But does turning off your power at the wall really save on your energy bill?
Here's Sensible Emily to tell you what actually works.
By Shiloh Payne
Is a second job worth it?
I got a second job to try and get more income but tax is making it not worth the time. Is there a way i can help this?
- Matty
Here's Emily Stewart:
Hi Matty,
It may feel like you’re paying more tax on your second job, but it should sort itself out when you do your tax return. The ATO actually calculates the tax you need to pay based on your combined income (so you will pay the same tax on your income whether you have one job or multiple jobs). You’ll probably pay more tax upfront, because you can only claim the tax-free threshold from one employer (if you’re an Australian resident you don’t pay tax for the first $18,200 you earn). So, if you claim that from your first job, you get taxed from the first $1 you earn on your second job. For more info, check out the ATO website.
By Shiloh Payne
Homes hit by the 'food pricing crisis'
The cost for some vegetables has spiked by 150 per cent in 12 months, so if you've noticed your grocery bill going up, it's not just your imagination.
Here's Iskhandar Razak to explain what's expensive at the moment:
But it's not all bad, the price of some items, like bananas and oranges, are actually going down:
By Nicholas McElroy
Keen investor, awful saver
Why do I love investing (I get a rush when I press a 'buy' order), but seem to be unable to keep cash in a savings account? Are there any psychological tips to build up some savings?
- awful saver
Jody Allen says a vision board could help:
You get a rush because websites and stores are fully optimised to get you to spend your money!
For me personally, I have a vision board for my savings — and this is what helps me keep on-track.
Our family are planning our first holiday in 10 years — so I have pictures of where we want to go — right on my fridge so I see them every day.
Every time I'm tempted to spend money on something I don't really need — I think about that trip… and it keeps me on track.
By Nicholas McElroy
Legumes and pulses
Why are beans so demonised as an option instead of meat? Spicy Chickpea Burgers, Pumpkin Butterbean Lasagna, Blackbean enchiladas... All so cheap and easy to make. Plus $1.40 bag of porridge with coconut, cinnamon, banana and chopped nuts. I'm currently spending about $110 a week for us as a couple for all meals. Food makes me happy but I do go without stuff I'd like to save money.
- Biddy Eats Beans
This is one from the comment section:
By Shiloh Payne
Should we be weaning ourselves off gas?
Chilly asks:
Planning some home renovations - should we be weaning ourselves off gas? Specifically, for hot water and also for heating - currently heaving ducted gas, thinking of going to hydronic?
Here's Lody Stewart:
Hi Chilly. We’re asking ourselves that very same question in our household as our gas cooktop, hot water and ducted heating are showing their age and needing to be replaced soon. For our household, we’ve concluded that’s cheaper for us in the long term to replace our gas with electrical energy efficient alternatives. Even though we don’t have solar power at our house, we will still be saving money in the long run on energy usage and hopefully making a difference by being on a ‘green’ renewable energy plan with our provider.
By Shiloh Payne
Our mortgage repayments are going up
That's right, as a result of interest rates going up, banks are passing on the rise to borrowers.
Sensible Emily explains some ways you can save:
By Nicholas McElroy
Budgeting for kids activities
How do I set a monthly budget for items that come up once a year or per school term, like for the car or kids activities? Ta
- Alex P
Here's Jody Allen:
Hi Alex, with kids activities - I tried something new for the first time last Christmas Holidays and it worked a treat.
I gave my boys a set amount of money that they had free reign to spend on activities over the Christmas break.
At first, they were excited and wanted to do things like the theme parks and go bowling every day, but once they realised how much these activities cost them - and how much money they would have left after these activities, they were a bit more thoughtful with it.
This not only made it easy for me to budget a set amount for them, but it taught them how to budget their money and research prices.
Now they are very careful and look for all the deals online to get cheaper tickets.
By Shiloh Payne
Consumer confidence falls to recessionary levels
Last week we learned that the prospect of further interest rate rises and house price falls has smashed consumer confidence, which is nearing the pandemic lows seen during the initial lockdowns of March-April 2020.
Westpac and the Melbourne Institute's long-running and widely watched consumer sentiment index dropped another 3 per cent to 83.8, well below the 100-point level that indicates when optimists equal pessimists.
As the graph above shows, how we feel about our personal finances has gone right down in 2022.
You can continue reading more on consumer sentiment from business reporter Michael Janda below.
By Shiloh Payne
What percentage of my salary should I be saving?
Here's a question from Hannah Mansfield:
I recently started working my first full-time job and I was wondering, what percentage of my salary should I be saving?
And this is what Emily Stewart says:
Hi Hannah, congrats on starting your first full-time job, that’s a big deal! It’s wonderful you’re thinking about how to set yourself up financially for the long term. I’m going to be annoying now and throw a question back at you – ‘what percentage of your salary could you realistically save?’. It usually comes down to your personal circumstances - are you living at home and have few expenses? Or do you have any debts you should be focusing on?
If it’s really just a choice between spending the money or saving it, I’d personally be thinking of a goal and plunging as much of my money into savings as possible. That way by next year you could probably afford something really big like a holiday or even a car.
Don’t forget – there’s another option here and that’s to invest. But that’s a whole other topic for another time….
Lody Stewart's suggestion for making a start at saving:
Another option when you’re not sure where to start, is to start by putting 10 per cent of your salary aside in savings. You can always build it up from there!
By Nicholas McElroy
What are some of the top budget-related mistakes you come across?
What do you see as your top budgetary-related mistake (or top few mistakes) that people make?
- XYZ
Lody Stewart says:
Good question. If I had to choose I would have to say these are three common mistakes:
- 1.Having a budget that is unrealistic and destined to be difficult to achieve
- 2.Having a budget that requires too much time to track and maintain. One solution for this would be putting money aside each pay in a separate account that your budget tells you will need for regular bill payments (like rent, phone, health insurance) and set up automatic payments for these.
- 3.Not budgeting for a bit of enjoyment from our hard earned income. We need to accept that we will have a bit of splurge, like going out for a meal or buying clothes, so our budget needs to accept this and put a limit on it. I cap mine at 10 per cent of my net weekly income, which is not much but it works for me.
By Shiloh Payne
Here's a look at the rise of the cost of living
By Shiloh Payne
How do I change how I see money?
Annie Hugo asks:
How do I change how I see money? E. G. I have budgeted money for groceries but the grocery budget always gets raided for other things AND if I know money is due to arrive I tend to spend it in advance. It seems I don’t see money and savings clearly and end up paying dearly for this !
Here's Lody Stewart's response:
Changing your money habits is hard and takes time but not all is lost. There are things you can do to help stop yourself from spending money now that you will need later.
For example: When you get paid break your money up into separate accounts, or ‘buckets’, that are for different things. If you have budgeted money for groceries then each time you get paid put that money into a separate low or no fee bank account that has a debit card. Write the words ‘groceries only’ in big bold letters on this card so you are constantly reminded what it’s for i.e. to buy groceries.
Be strong Annie – don’t be tempted to use it for anything else. You should check from time to time to make sure you are putting enough into your grocery ‘bucket’ and try and keep a bit of a buffer (savings) in there for times like Christmas, New Years and birthdays when we all tend to buy more groceries.
By Shiloh Payne
I rent. What can I do to lower energy costs?
We've got this question from Yas Acar:
Energy costs are a huge expense in the family budget. Aside from going "off the grid" what can we do in a rental property to reduce this cost?
Our expert Lody Stewart says there's lots of ways you can reduce your usage and save money on you electricity, gas and water bills, here are some of her examples:
- setting the temperature to 18 – 21 degrees in winter on your air conditioner
- turning off computers and game consoles at the wall when you are not using them
- switching to low energy LED lighting (some state and territory governments are offering discounted energy efficient lighting for renters but you'll need to check with your landlord first)
- if you can — replace old inefficient appliances with new energy efficient ones (your state or territory government may offer a rebate or discount if you do this)
- check that you are on the best plan and that you are receiving all the energy rebates and concessions you're entitled to from your state or territory government, etc.
Lody also recommends that you check out energy.gov.au, a website maintained by the Department of Climate Change, Energy, the Environment and Water – She says it has all the information and links to help you compare offers from electricity and gas retailers, guides on how to reduce your energy bills, rebates, concessions, support and other offers available from each state and territory government, and understand your rights.
By Shiloh Payne
It's no secret, the cash rate is on the rise
If you joined us for our interest rates blog a couple of weeks ago, you'll know that the cash rate has gone up.
On July 4, the Reserve Bank lifted the cash rate by another 0.5 percentage points, making the rate 1.35 per cent.
The RBA has warned this won't be the last of the rate rises as it works to rein in inflation.
Here's a graph that shows the sharp jump in the cash rate:
You can continue reading more on this with the link below.
