River Read | Petrol, Power, Property, and Produce

Petrol, Power, Property, and Produce | Starting the New Financial Year Amidst the Rising Cost of Living

With Treasurer Jim Chalmers warning that inflation at the end of the year will likely be in line with the Reserve Bank of Australia’s (RBA) predictions of around 7 per cent, the rising cost of living in Australia is only set to increase in the coming months.

While there’s no shortage of exaggerated fear-mongering around this topic, that doesn’t negate the real-world shortages that are having real-world effects on our cost of living:

• Petrol prices are higher thanks to the global flow-on effects of multinational sanctions importing fossil fuels from Russia,
• Utilities are set to increase due to the above conflict, supply chain issues, and severe weather events,
• Housing costs are increasing in the form of mortgages and rents due to the rising cash rate and low rental availability all over the country, and
• Food prices overall are predicted to rise by a further 2-3% by Woolworths boss, Brad Banducci, thanks to the combined effects of petrol shortages and global inflationary pressures.

Although the cost of living is undeniably rising – which is the primary reason that the RBA has begun lifting the cash rate from its historic low – there are several ways that Australians can mitigate the effects of these rises.

Transport

• Carpooling:

  Though it’s not always viable, sharing a ride with family, friends, or colleagues is an excellent way to reduce your weekly petrol bill, as well as the wear and tear on your vehicle.

• Public transport:

  While this is much easier in capital cities than in regional areas, replacing or cutting your daily commute with a bus or train could see you cut your weekly transport bill by over 80%. If you can’t make it work through the week, consider your weekend travels – catching the train from Newcastle to Sydney and back is capped to just $8.50 with an Opal card, compared to the $50 to $100 you’d spend on fuel, depending on your engine efficiency.

• WFH arrangements:

  While face masks, density limits, and QR check-ins are all but gone for most of us now, something that’s remained is the infrastructure and procedures that were developed to enable working from home. If it’s feasible for your role, consider requesting to work from home for one or two days per week. Not only will it cut your travel costs; it might even make you more productive.

Utilities

• Electricity:

  You might already be turning off the lights when you’re not in a room, but there are scores of other simple tips to reduce your home’s electricity usage, most of which can be taken advantage of by both renters and owners.

• Gas:

  The same goes for gas. From leaks to degrading systems; there’s often far more to rising gas bills than simply heating your home throughout winter.

• Providers:

  Lastly, shop around. While all energy providers will be affected by the wholesale prices, there are far more options available today than there have been in the past. Service NSW’s Energy Made Easy tool was developed purely for this reason.

Housing

• Buyers:

  If you’re buying, link up with a local real estate agency that knows the area well, and consider joining VIP pre-market groups to get advance access to new properties before they go to market.

• Renters:

  While simply finding a rental property can be difficult at the moment, high-quality tenants can often negotiate rent increases with far more success than those who don’t take care of the property. Just keep in mind that, with rising interest rates, landlords often don’t have much choice in the matter.

• Sellers:

  If you’re selling, ensure that the agency you’re partnering with conducts high-quality market research and has a wealth of experience developing and deploying campaigns. You might also consider having your home professionally staged to increase its appeal, or undertaking a comprehensive Property Improvement Plan to significantly boost your sale results.

Food

• Weekly shops:

  If you’re on the way home after work on a cold winter’s night and remember that you still need dinner, pulling into your local drive-through or calling up for delivery can be all too alluring. Purchasing your weekly meals ahead of time can save hundreds of dollars per month, and you’ll likely make far healthier choices.

• Stick to the outside:

  When you do make it to the supermarket, you can drastically cut down on your bill by simply avoiding the middle aisles as much as possible. While you’ll need to duck in for pantry staples, there are often four to five aisles filled with confectionary, pre-made meals, sugary drinks, and packaged snacks that are often unhealthy and overpriced.

• Stay flexible:

  Lastly, while meal planning is an excellent way to reduce costs, try to remain flexible with your choices. While it might be tempting to join the outcry on social media about $10 lettuces, you’ll save time, energy, and money by simply opting for rocket or spinach instead.

Adopting a money plan

Along with finding lower-cost (and free) activities in and around the Hunter, you might want to kick off the new financial year with a money plan. Check out our guide here to see 7 simple ways to refocus your finances.

While there are many aspects that we can’t change about the rising cost of living, we’re likely to find ourselves both happier and wealthier if we focus on the aspects that we can actually influence.

After all, developing good habits around your finances will last a lot longer than periods of high inflation, and adopting a mindset around what you can control – rather than what you can’t – will provide far more value than simply saving a few thousand extra dollars per year.