Interest Rate Hikes? Hit Them With Your Best Shot!

With interest rate rises being the talk of the town, it’s time to consider your best defence.

And what exactly is your greatest weapon against rising costs? The household budget, of course! Knowing how much you earn and how much you spend is critical to staying on top financially. So, dust that spreadsheet off, and take a long, hard look at your spending. The four main areas where we tend to bleed cash are home, food, transport and credit cards. Here we’ve made some suggestions for quick, easy changes. Remember, little things can add up to make a big difference.

Home

If interest rate rises have hit you, have you reviewed your mortgage? Do you have the best mortgage for your circumstances? Is it a good time to consider refinancing? It’s always worthwhile taking time for a mortgage check-up.

But if you’re really feeling the pinch, then perhaps it is time to consider whether or not you could rent out a room to a student or traveller. Maybe you could even take advantage of Airbnb. Both can be great ways to boost your income if your expenses have increased, but beware, there are strata regulations to adhere to concerning Airbnb as well as tax implications, and you probably want to check on your insurance to ensure you’re covered for flatmates or guests. Do your research first.

Food

Did you know the average Australian household ends up with $1,000 in food wastage every year? By any measure, that’s significant. So, planning is vital to ensure you’re not one of them.

Shop only for what you need. It’s okay to visit the grocery store a few times a week if needed, but do your best not to impulse buy. Instead, consider ‘specials’ and ‘in-season prices’. If you can shop on a budget and minimise waste, you might be surprised at what you can save on groceries.

The other biggie, of course, is eating out. If you’re serious about saving, cut out the takeaways, the bought lunches and the meals. These add up. A great trick when saving money is catching up with friends for coffee. Skip the brunch with the cocktails, and meet at your favourite café for a quick drink. These are easy savings that won’t impact your social life.

Transport

Do you have car finance? Would it be cheaper to get a personal loan? Some car finance contracts are difficult to exit, but they can be worth researching. Other saving ideas are shopping around for insurance and cutting petrol costs by carpooling, walking or riding your bike. Weighing up public transport costs, especially if you’re paying parking fees while at work all day, can be financially beneficial. It might be less convenient to catch the bus or the train, but it could save you a lot of cash.

Cut up your credit card

A credit card is a great thing to have on a rainy day, but most of us don’t just use our credit cards during times of trouble. They’re often used when we go out, for online shopping, and even for window shopping. If you’re feeling the pinch financially, you should first get your credit card debt under control. When you do, it is one less costly repayment that you won’t need to make.

Interest rate rises can be stressful, but remember that there are always steps you can take to make sure you can continue meeting repayments as well as get on with the rest of your life. Talk to us. We can help.