The Times Australia
The Times World News

.

The cost-of-living crisis is hitting hard. Here are 3 ways to soften the blow

  • Written by Ama Samarasinghe, Lecturer, Financial Planning and Tax, RMIT University
The cost-of-living crisis is hitting hard. Here are 3 ways to soften the blow

As our wallets feel the strain from the cost-of-living crisis, many of us are looking for ways to soften the blow.

While everyone’s circumstances are different, and ideally you should seek help from an accredited financial adviser, there are some tried and true ways to work out where all your money is going and why.

Here are three practical tips to reduce the impact of the cost-of-living increases, and stretch every hard-earned dollar.

1. Hunt for a better loan rate

For many households, the biggest hit comes from the mortgage, so start there.

Even a modest 0.5% reduction can translate into substantial savings. Call your bank today and just ask for rate reduction. If the answer is no, consider shopping around for a different lender.

Your loyalty to your current lender might be costing you more than you realise. Banks often reserve their most attractive rates for new customers, leaving long-time customers paying higher-than-necessary interest.

A woman looks at her phone while sitting in a chair.
It’s OK to shop around for a different lender. Shutterstock

Even if your bank does agree to a rate reduction, explore the market anyway. There is a range of free rate-comparison websites, or you can directly check individual bank websites.

If you find a lender offering a better rate, you might consider calling the competing bank to ask about switching your mortgage to them.

Or, you might seek assistance from a mortgage broker, who can guide you through the process of securing a better deal (just remember they often take commissions[1] from lenders).

Tread carefully and factor in any exit fees or charges from your current lender. Refinancing isn’t without risk, so a thorough cost-benefit analysis is important before making the switch.

Also consider the value of features such as offset accounts[2]. An offset account, linked to your home loan, allows you to deposit money such as your salary and savings. This money is then “offset[3]” against your home loan balance.

That means you only pay interest on the outstanding amount (the loan minus whatever salary and savings you put in the offset). This can accelerate loan repayment and reduce interest costs.

Keep in mind that offset accounts are typically only available with variable interest rates. Offset accounts work best if you have considerable savings to put into the offset account that outweigh the additional fees and charges attached to offset accounts.

2. Trim your expenses and uncover hidden savings

It’s time to become a budget detective, identifying and cutting down on non-essential costs that might be quietly draining your wallet.

Take a close look at those recurring memberships and subscriptions. How often do you actually use that gym membership or streaming service?

Many banking apps have handy spending tracking features to help you set realistic budget goals for each spending category.

According to the Australian Bureau of Statistics[4], insurance and financial services are among the top risers in living cost indexes (which measure the price change of goods and services and its effect on living expenses). So search comparison websites for better insurance premiums.

Australia’s insurance market is competitive, and you can often get discounts by bundling your insurances together (for example, having your home and contents insurance with the same company that also provides your car insurance). However, don’t shy away from exploring different insurers for potentially better value.

Don’t overlook energy costs, either. Use comparison websites like Energy Made Easy[5] (or, if you’re in Victoria, the Victorian Energy Compare[6] site) to find more cost-effective energy plans. Stay updated on rebates and concessions via the federal government’s Energy.gov.au[7] site, to ensure you’re maximising your entitlements.

Use less energy, if you can. Small adjustments can make a significant dent in your bills. And for fuel costs, find websites and applications that allow you to lock in the lowest prices in your area.

If you’re renting, ask yourself whether moving to a cheaper suburb or a cheaper home is an option.

Many people use cashback sites like Cashrewards and ShopBack to accrue cashback incentives.

A woman does exercise in front of the TV. Do you get good value from your gym membership or could you save by exercising at home? Shutterstock[8]

3. Maximise returns and tackle high-interest debts

While rising interest rates might make your mortgage climb, it also means high interest on your savings.

Consider exploring high-yield savings accounts; with current interest rates, you could potentially earn around 5.5% with a bank savings account. Many people set up recurring transfers to help them stick to savings goals, increase deposits and maximise interest earnings.

For those wrestling with high-interest debts such as credit cards or personal loans, prioritise settling outstanding balances to minimise interest payments. It can be hard to escape the long-term repercussions (such as a poor credit score[9]) of defaulting on high-interest loans[10].

And approach buy-now, pay-later services with extreme caution. They may seem tempting but the debts can quickly add up[11].

And if you need more help, contact the government’s free National Debt Helpline on 1800 007 007.

References

  1. ^ commissions (www.canstar.com.au)
  2. ^ offset accounts (moneysmart.gov.au)
  3. ^ offset (www.rba.gov.au)
  4. ^ Australian Bureau of Statistics (www.abs.gov.au)
  5. ^ Energy Made Easy (www.energymadeeasy.gov.au)
  6. ^ Victorian Energy Compare (compare.energy.vic.gov.au)
  7. ^ Energy.gov.au (energy.gov.au)
  8. ^ Shutterstock (www.shutterstock.com)
  9. ^ poor credit score (theconversation.com)
  10. ^ high-interest loans (www.sydney.edu.au)
  11. ^ debts can quickly add up (onlinelibrary.wiley.com)

Read more https://theconversation.com/the-cost-of-living-crisis-is-hitting-hard-here-are-3-ways-to-soften-the-blow-218118

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Tricia Paoluccio designer to the stars

The Case for Nuturing Creativity in the Classroom, and in our Lives I am an actress and an artist who has had the privilege of sharing my work across many countries, touring my ...

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...