Tips to cope with rising inflation and cost of living

Tired young man feel pain eyestrain holding glasses rubbing dry irritated eyes fatigued from computer work

According to the Reserve Bank of Australia (RBA), inflation is forecast to reach 6% in the latter part of 2022.

This increase is echoed across the globe as economies deal with supply chain interruptions and increasing commodity prices.

Step Up Financial offers seven easy tips to help cope with rising living costs.

Close up cropped image young woman calculating monthly expenses

Tip #1 : Budgeting

The impact of increased inflation will undoubtedly affect almost every touch point in your day to day living. Fuel prices have reached record highs, which are attributed to the unrest in Ukraine, and the UN global price index is up 27% over the last year. The World Bank is anticipating growing food and commodity prices for the next three years due to the unrest in Eastern Europe.

Unfortunately, these increases have a direct effect on daily living expenses, so updating your monthly budget and sticking to it are critical.

Divide your budget into housing, transport, food, utilities, insurance, healthcare or medical, school fees, entertainment, home maintenance, clothing, memberships, beauty, savings, investment or debt repayments and miscellaneous expenses (home appliances, decor etc). We’ve set up a budget guide to help itemise your monthly expenses.

Serious young African woman holding paper document calculating rent or money savings

Tip #2 : Get serious about your spending

Once you’ve gone through your budget and you know what your monthly expenses are, you may need to consider reducing some of your expenses or removing them altogether. YouTube is flooded with home workouts that you may want to consider instead of a monthly gym membership. Daily coffee runs may need to become weekly coffee treats and canteen lunches are just as good (sometimes even better) coming from your own kitchen.

Young happy couple using smartphone in supermarket with shopping cart choosing products while grocery shopping

Tip #3 : Finding alternatives

Habits are reflected in day to day spending. If you are used to buying a specific brand of product and have never stopped to check the price difference of a cheaper alternative, now may be the time to start doing so.

On your next visit to the store, take the time to look at the washing powder options, as an example. The price difference for a box of powder differs considerably from brand to brand, yet reviewers often find the cheaper options deliver better results.

Business men are experiencing debt problems sitting stressful on your desk with a lot of documents and bills

Tip #4: Don’t neglect your debt

Easier said than done when under financial pressure. In modern day society, borrowing money has never been easier. But credit cards, rent-to-buy, no-deposit, after-pay and the like are all schemes that offer instant financial gratification with hidden fees and high interest consequences.

Avoid entering into debt relationships that may require debt management strategies to get out of later.

Investopedia suggests 20% of your monthly salary after tax should be allocated to savings AND debt repayments, so don’t over commit. Paying close attention to your budget should assist you in identifying what you have available to spend. If you have already over committed and find yourself in an overwhelming debt repayment situation, speak to us about debt management.

man pulling money out of wallet

Tip #5: Turn off the taps

We love technology. It has shifted the way we do everything and continues to evolve at expeditious rates. It makes life easier and seamless.

For budgeting purposes however, it may put you at a financial disadvantage. Being able to simply tap your card or phone for instant purchases may leave you in the dark with your daily spending, so try to give yourself pocket money in cash and use that instead. That way, you are in constant and conscious control of where your money is going. It may even boost your bank balance.

Annoyed woman holding a smart phone looking at camera with thumbs down in the street

Tip #6 : Switch off spam

As tempting as those email specials and never-to-be-seen-again price drops are, acting on them will quickly spiral your financial situation into the drains of debt.

Unsubscribe to email blasts and remove shopping apps from your device. Plan your purchases and be deliberate about what you’re buying.

Australian Five Dollar Note

Tip #7 : Find ways to save

A while back, the $5 challenge was doing the rounds on social media. We embraced the challenge then and would recommend it now. The idea is to save every $5 you get and put it in a jar and don’t touch it for a year. Those $5 really do stack up and this is an easy and great way to get creative with your saving.

Speak to our fully qualified, experienced financial planners, who can help you understand and plan your monthly budget more effectively. We are also able to provide other financial services, including advice on:

Need more information? Get in touch with Step Up Financial

    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445