If you feel like your dollars aren’t stretching as far these days, you’re not imagining it.
Inflation has been surging in the past few months, with data from the Australian Bureau of Statistics (ABS) showing it was up 7.8 per cent in the December quarter last year.
While the situation isn’t expected to ease overnight, there are a few things you can do to reduce the pressure. Here are some tips.
1. Do a spending audit and slash discretionary expenses
Think about going through your card statement for the past month and making a list of ‘essential’ and ‘non-essential’ items. Non-essentials include things like dining out, entertainment, subscriptions and some personal care expenses (for example, getting nails done or hair dyed).
Consider cutting back on things that don’t fall into the essential category. Even removing one or two nights out could put $100 or more back into your budget.
2. Negotiate a better deal where you can
Generally speaking, there are two ways to increase your purchasing power: earning more or paying less. For the former, some Australians are using this period of high inflation to argue for a higher salary.
If that’s not an option for you, think about monthly or quarterly costs that can be negotiated. Some insurers, phone, pay-TV and energy companies are willing to negotiate – think about doing some research and making the call.
3. Get strategic with shopping
Before hitting the supermarket, come up with a plan. That may mean making a stringent list and checking the supermarket apps to see where the discounts are. Also, think about abandoning the brands and shopping generic. Often, with brand items, you’re paying a premium for fancy packaging.
4. Target fresh items whose prices haven’t risen as sharply
While inflation doesn’t spare much, some food items have had steeper price increases than others. For example, ABS data shows that in the year to November 2022, dairy products jumped a whopping 15.3 per cent, while bread and cereal products went up 12 per cent. In contrast, prices for some other food items rose at a slightly slower rate. For instance, meat and seafood went up 8.1 per cent and fruits and veggies went up 9.5 per cent.
Being a bit more cautious with items that have had big jumps in price and targeting those that have risen to a lesser degree could be one way to save.
5. Leave the car at home if you can
Before general inflation even hit the headlines, petrol prices were surging due to supply issues. Unfortunately, there has been little reprieve.
If you can, trade the car for public transport, bicycling or walking. If that doesn’t work, think about car-pooling with neighbours or friends.