Fair Go’s Tips for Saving Money During the Rising Cost of Living

We’ve all heard about the rising cost of living in Australia, and most of us have even felt the impact of the cost-of-living crisis, but what actually is ‘cost-of-living'?

Put simply, the cost of living is how much it costs to fulfil our daily survival needs - basic needs such as housing, household bills, groceries, and transport. You know, the bare minimum costs needed to live.

When the cost of these basic and essential needs goes up, then we say the cost-of-living’ is rising because it takes a larger portion of our income to survive.

What causes the cost of living to rise?

Without going into a full-blown economic definition, the rising cost of living is related to the include of the Consumer Price Index (CPI) and inflation. When CPI rises faster than household incomes, then the cost-of-living increases.

In the years since the pandemic, every day Australians have seen groceries, rental prices, mortgage payments, household bills and transport prices skyrocket, putting a heavy strain on Aussie household budgets.

Budgeting Tips for Aussie Households.

Here at Fair Go Finance, we want to see everyday Aussies like you struggle less with cost-of-living increases, so we’ve rounded up our top tips to help relieve some pressure on your finances.

Groceries

In short, increased transport costs, caused by both increases in the cost of fuel and disruptions to transport logistics (especially with floods impacting rails) are a significant cause for the increase in groceries.

And it shows, in the 12 months from March 2023 to March 2024 groceries continued to rise by 3.5%. This is on top of the significant increases in 2021 and 2022.

How can you save money on groceries?

There’s a litany of advice out there on the best tips to save on your grocery bill, some of them are practical and some less practical, depending on your household's needs.

Our favourite tips for saving money on groceries include:

Meal Planning

Wait – before you roll your eyes at this generic tip, keep reading to get our tangible steps to make meal planning actually work to reduce your grocery bill.

Meal planning isn’t just writing a week's worth of meals down on a piece of paper, sticking it on the fridge and then writing a grocery list from that.

To truly save money and reduce your grocery bill, there are a few different things you can do to make meal planning work for you.

Start by doing a stocktake of your current pantry, freezer, and fridge.

We’re all guilty of buying things we already have because we can’t remember if we have that ingredient for a meal. A fair chunk of grocery bill shock comes from buying things we don’t need because we can’t remember if we have them or not.

Go through your pantry and take note of what you already have and the quantities. Then – store that list somewhere you can easily access at the supermarket. If you’re a family, have that list sharable so anyone can update it. A shared Excel or Google Sheet works fine – no need for fancy apps.

Use your pantry inventory to write your dinner menu.

When you have a pantry inventory, it’s a lot easier to reduce your grocery bill on the weeks when money is tighter. Plan your meals around the ingredients you have.

Prepare ahead.

If you know that Tuesdays and Wednesdays are harder to get a meal on the table because you’ve got kids’ activities to run to, or you’ve got that work commitment that runs late, then preparing meals ahead makes those days easier.

Cook a double serving of a meal on days when you’re not so busy that you have leftovers you can freeze. Don’t like leftovers? Easy - precut and then freeze the ingredients for a meal to cut down on prep time on those busy days.

Shop the supermarket specials.

Choice.com.au found that there’s little price difference between the major supermarkets, so most of the money saved on grocery bills is when households take advantage of supermarket specials. Choice found that households can save up to 40% on their weekly grocery bill by doing this.

Use the supermarket apps to track specials on items you normally buy so you’re saving every dollar you can.

If you use supermarket loyalty programs, keep an eye on offers that boost your reward points that you can use to save money on grocery bills later down the track. Top tip – save those points and dollars for Christmas shopping.

Don’t have time to go between supermarkets? We get it. Between work, social lives and activities, many of us are time-poor. Organise click-and-collect (or even delivery) for your big shop and then you can pick up the rest of your groceries at the other shop. Click and collect or delivery also helps you save money by preventing those impulse buys that add up.

Buy in Bulk.

If it’s feasible – consider buying your pantry staples in bulk when they go on special. Consider a Costco membership or shop from meat wholesalers to bring the cost of your food shopping down.

Household Bills.

Along with groceries, increases in household bills have also had a significant impact on the household budget.

Why has my electricity and gas bill gone up so much?

In short – the wholesale costs of generating electricity and extracting gas have gone up as well as the retail cost due to the need to invest in the network costs to ensure the energy pipelines can continue to service all households.

Increased electricity bills are also the result of global coal prices increasing due to coal shortages.

Related article: How to save on your winter energy bills

How you can save money on your electricity, gas and water bills?

Small changes every day make a world of difference.

Our favourite ways to save money on household bills are:

• Swapping to LED lights and energy-efficient appliances is a surefire way to start bringing those electricity costs down.

• Keep on top of home maintenance – checking windows for draughts is a great way to reduce your heating costs in winter. Check your taps for drips to save on your water bills.

• If it’s possible, invest in solar panels and use appliances like the washing machine throughout the day when the energy is free.

• Bill smoothing – while this might not bring the actual cost of your energy bill down, bill smoothing can help reduce bill shock and make it easier to budget for these bills.

Transport Costs.

Transport has been one of the biggest impacts on the household budget.

But why have transport costs gone up so much?

Long story short? The cost of fuel has increased due to the increased price of crude oil post-pandemic when travel became more regular. This was passed onto Australian in the form of higher prices at the fuel pump, expensive holiday and travel and even expensive public transport.

How can you reduce transport costs on your household budget?

The most obvious one is to fill up the car on cheap fuel day. Most states have a fuel regulator that monitors the cost of fuel across the state.

Other hot (but obvious) tips include:

• Use public transport where you can.

• Maintain your car to keep it as fuel-efficient as possible.

• If hybrid working is possible for your job, working from home some days will help you save on transport costs.

Housing.

Rent and mortgage costs are probably the biggest expense on the household budget. And while the speed of these price increases has slowed, prices are still increasing with housing increasing 4.9% between March 2023 and March 2024.

Why is housing so expensive post-pandemic?

There are several reasons housing costs have sky-rocketed since 2021.

• Inflation and CPI increases have caused the RBA to increase interest rates which banks have passed down to mortgage holders. The cash rate has gone from 0.10% in May 2022 to 4.35% in May 2024. This also impacts rental prices as landlords increase rents to cover the costs of higher mortgages.

• Demand for rentals has driven rental prices up.

• High construction costs of new homes post-pandemic. The cost of materials has increased as well as the cost of labour.

What can you do to reduce your housing costs?

Unfortunately, rent and mortgages are one of the hardest things you can reduce the cost on because you’re at the mercy of banks and landlords.

If you’re a mortgage holder, start shopping around for lower rates on mortgages. Using a tool like Money.com.au to compare home loans can help you save up to $200 per month (based on a $600,000 home loan).

If you’re renting, you might need to consider relocating to locations where rents are lower.

Working on improving your credit score is a great way to open up your options to access better rates on finance for a mortgage or refinancing your current home loan.

What happens if I’m still struggling to navigate the rising cost of living?

Sometimes all the budget tips and tricks in the book aren’t enough to help. If you’re starting to experience severe financial hardship, it’s important to seek help early.

Financial counsellors are a great resource to help you manage debt and household budgets. Money Smart is a great starting point when looking for financial counselling.

What’s next?

It’s important to keep on top of your household budget during the rising cost of living. Pivot where you need to so you can weather any financial storm that comes your way.

And if you get caught out – see how our personalised pricing on our household bill loans can help you out in the short term.