2022 has come as a shock to many people with the ever-rising cost of living. Everything we need to pay for has seemed to go up. Petrol prices are out of control. Our weekly grocery shop has risen astronomically from what it was last year. Interest rates have risen meaning our mortgage repayments have gone up.
Energy bills are soaring as and electricity rates hit record levels. Add to this the rental shortage crisis and subsequent rent increases mean that many are feeling the pinch and stress around keeping a roof over their head.
There are many factors for this rise in the cost of living. Climate change is causing more natural disasters like droughts, bushfires and floods. This has a flow-on effect with the availability and quality of fresh produce. The war in Ukraine is affecting our accessibility to oil and gas. Petrol is at an all time high. The Covid pandemic has seen a shortage of workers, delays in transportation, a reduction in spending and an increase in inflation.
These are uncertain and stressful times and seemingly no-one is immune. It feels like every area of our life is affected by the rising cost of living yet our wages haven’t gone up enough to bridge the gap. It is particularly worrisome for those who are unemployed or underemployed, on the minimum wage, on one income, going through a divorce or desperation, battling a chronic health condition or illness, or on a pension. Spending on the most basic of necessities feels out of control. For those trying to make ends meet, this is feeling less achievable.
The big question is, what can we be doing to cope with these rising costs of living? How can we keep from drowning under this pressure? How can we move from treading water to feeling back in control, swimming our own race again?
There are a number of things we can do to reduce the impact and keep our head afloat. There is no quick fix, no easy solution, particularly for those really feeling the pinch right now. I do however, have some suggestions about how we can make a few changes to our lifestyle to make a difference moving forward.
Start with the biggest expenses such as housing, food and utilities and see how you can save money there before moving on to the smaller ones.
For those with a mortgage and struggling with the cost of living, make sure you shop around for the best deal. Consider getting a mortgage broker who can help you negotiate and find the right lender for you. The lowest interest rate doesn’t always mean it is the best deal, and keep in mind that fixing your rate will restrict how much extra you can pay off. If you are not wanting to refinance, sometimes simply ringing up your bank and asking them if you are on the best deal can reduce it there on the spot.
They prefer to keep customers where they can so if you play hardball, they may lower your rate to keep you. If not, don’t continue being loyal. Find a better deal elsewhere and switch. If possible, pay a little more than your minimum mortgage repayments. If you have an offset account, consider paying extra so it acts as emergency fund against your mortgage to reduce the interest payable. Provided you can redrew if necessary (with no fees), this can be a good way to have money aside in case you need it.
There is no denying that food prices have gone up, even over the space of a few weeks and months. Experts are prediction that iceberg lettuce is going to go up to $10 each. That’s insane! Although we can’t avoid paying more at the checkout, we can do a few things to reduce the impact on our budget. Meal plan from what you have left in your fridge, freezer and pantry and buy some top up ingredients to make dinners.
Use up what you have in your fridge already and clean it out regularly so items don’t go to waste. Have top up weeks where you aim to buy milk, bread, fresh fruit and veggies, and any other staples you need. Check out the $21 challenge that can save you lots and inspire you to use what you have. Shop with a list and buy fresh produce that is in season. For items out of stock or too expensive, look in the freezer section to see if it is more economical to buy that way (for example, broccoli, beans and spinach are handy in the freezer).
Plan more meat free meals, and for the days that you do consume meat, bulk it up with blitzed veggies. Pasta sauce is a great way to have vegetables inside and can be a way to get fussy toddlers to eat their greens. Lower your standards. Your lunches and dinners don’t need to be gourmet. Keep it simple, healthy and delicious, and don’t be afraid to repeat your favourite dishes in your menu plan.
If you are able to, do a bulk prep and cook of your meals so you don’t have to be in the kitchen all of the time. Last night I cooked zucchini slice, zucchini chicken, sweet potato chips, potato bake and pumpkin scones. I had the oven on for two hours and used bacon, zucchini and onion across different dishes. Growing a herbs on your windowsill and basic vegetables in your garden means you always have a few fresh ingredients on hand without having to run to the shops.
When the price of everything keeps going up, it is important where possible to consume less energy. When you’re at home in winter, try to keep warm using good old fashioned methods before turning on the heater. Think about putting on a jumper, wearing ugg boots, putting a blanket over your legs and consuming a hot drink.
We often go to bed after dinner and cozy up under our quilt with a wheat bag – it saves putting on the heater and it’s the warmest place to be. Another idea is to use an exercise bike or Chromecast a YouTube workout to get you fit, moving and warm. Cooking with the oven on warms the house, and it makes sense to cook a few things at once so you won’t need to use your oven everyday.
Consider doing an energy audit. We’ve just borrowed a kit from our local library and could figure out which appliances were using the most money, and how much a year they are costing. Turn off PowerPoints at the wall to stop items using energy on standby, and seal up any gaps to prevent the warmth from escaping.
Close the air conditioner vents in winter, and better still, cut wood blocks to size to put in their place for extra warmth. Lower the thermostat by a few degrees if it is adjustable. Ring your provider to get a better deal and compare it with their competitors to check you are on a fair price. Take shorter showers.
In summer, putting the air conditioner on early in the day means it doesn’t have to work so hard in the heat of the day to bring the temperature down. Get the unit serviced every year or two to ensure it is running effectively. Wear light clothing, exercise in the cooler parts of the day and close the blinds to keep the heat out.
Have a cool shower or bath, get the kids into a splash pool or under the sprinkler, or dip your feet in a little pool after work with a cold beverage. Have meals that don’t require using the oven where possible so the house can stay cool. Consider installing solar panels if you can afford them, as these can reduce your energy bills dramatically.
Despite the cost of living rising, insurance is still important to have. Shop around for the best deal on your house and contents, car, health and pet insurance. Don’t pay the lazy tax by not reviewing your rates annually. It can be a pain to do but a few simple phone calls can save you hundreds. If you get security system or cameras installed on your property, it can reduce premiums. Make sure that you are properly covered in the unlikely event that you’ll need it.
Consider putting some limits around what extracurricular activities you sign your children up to. This can help to reduce your driving, saving on petrol, not to mention saves on registration fees and uniforms. If you’re in South Australia, make the most of the School Sports vouchers that save $100 per child per year on fees, and similar programs exist in other states and countries to encourage more participation.
This doesn’t have to mean forever, but at least until you have your head above water. Who knows, you might enjoy a slightly slower pace of life when you say no more often.
Living in a hot country surrounded by water, I think it’s very important that children learn to swim. Swimming lessons too expensive right now? If you have an infant, consider buying a block of casual passes and taking them for swims yourself. Watch what they do in baby lessons and try to replicate it yourself, by using songs to move them through the water and helping to familiarise them.
Consider VACSWIM for children aged 4 and up. $50 for a full week in my area, plus we get free casual swimming at the centre. My kids get 15 hours of swimming with 5 of those hours lessons, for $50 every summer. You can add a beach week in too if you want them to learn extra skills. If you know someone with a pool, see if you can visit sometimes for extra practice.
Rethink getting a pet
This may be controversial but I’m going to say it anyway. If you are struggling with the rising cost of living and putting food on the table, now is not the time to get a pet. Unless you are living alone and need the company, if at all possible avoid buying a new pet. I am not saying you should give up any current animals you own. However, pets like dogs and cats can be incredibly expensive.
Think purchase cost, accessories, bedding, food, veterinary bills, medication and holiday boarding. They can reduce your chances of getting a rental, especially in such a competitive market. If you are willing to sacrifice in other areas and have a sinking fund for your pet that you regularly add to, it might be fine, but please don’t forgo your own ability to provide for yourself because you take in a pet.
Know where your money goes
It is important to know where you money is going so it doesn’t trickle through your fingers. You can track your spending on a spreadsheet or via an app. WeMoney is one that I personally use (we both get $5 if you sign up and they plant a tree!). I write more about the features of WeMoney (such as credit scores, net worth, community posting, podcast and blog) here if you’re interested to find out more. Another way to do it is to simply set up direct debits so on payday, money is diverted into different accounts. For us, we have the mortgage deducted, then money goes into sinking fund accounts for spending, car repairs and upgrades, furniture and appliance upgrades, renovations, school and sporting fees, holidays and investing. I like this method because you make sure you put money away before you’re tempted to spend it and we can afford expenses when they come up. You can set up sinking funds for anything including Christmas, wedding, birthdays, pets, health etc. Getting your finances set up well helps you to cope with the cost of living and feel prepared for whatever is around the corner.
There is only so much you can cut out. Frugality is a wonderful way to be more mindful of how you spend money but it can be quite a restrictive way of living. Consider starting a side hustle so you have a little more spare cash. This could be delivering pizza or Uber Eats, tutoring or babysitting, starting up a YouTube channel or podcast, or writing a blog. You can take up a second job or start your own business. Side hustles can be a fun way to make extra money and get paid to do something you love. Canna Campbell has some great ideas in her bestseller, The $1000 Project.
Sell unwanted items
Needing extra cash to cope with rising costs of living? Suffocating in stuff? By going through and decluttering your things, you could find items of value to sell on Facebook Marketplace and Gumtree. When you take the time to sell things, it can make it easier to part with them if you are getting some money in return. I’ve sold some of my competition winnings, like a rocking chair, to fund a massage chair instead. We’ve been surprised with how much stuff we actually had and sold well over $10,000 worth over the last few years. Your house will feel lighter and your wallet heavier.
If you have a hack for spotting a bargain or seeing potential, flipping might be for you. Spot a chest of drawers in hard waste? You could take it home and upcycle it, pocketing a profit when you sell. Find an old book collection in the op shop? List it on eBay and watch the bids come in. Discover an item on clearance in a store that is sold out everywhere else? Sell it for a higher price online, especially if it is rare or in demand. Teaching Brave found a Louis Vuitton scarf in an op shop for $3 and sold it for over $400!
A clever way to be savvy with the money you have is to utilise cashback apps. My favourite two are Cash Rewards and ShopBack. They both run promotions where you can get extra cashback from certain stores. It often takes weeks or even months to receive the cashback but then you can transfer it straight into your account. Both give you money upon signing up (please note that I receive a sign up fee) and then any friends or family you refer, you get a bonus too! This can add up, especially if you know lots of people who don’t have these apps yet.
Talk with your family around their expectations for gifts. Suggest limiting how much to spend and who you need to buy for. Does every adult need to get a present? Do children need to get a gift from everybody? It can feel awkward bringing up this topic of conversation but for all you know, others are feeling the same way.
The older we get, the more we often value time spent together over material things. We’d prefer to buy what we want much of the time anyway too. Don’t be afraid to suggest putting in boundaries around gift giving and see what happens. It might save you some money, but also your sanity.
Buy less toys
For parents reading and for whom money is extra tight right now, stop buying toys where possible. Make it part of your routine to visit your local toy library. There is almost no need to buy toys when libraries today are stocked full of such a huge range.
For a small annual fee, you can have access to all the toys, puzzles, educational toys, puppets, board games, ride on cars, scooters and dress ups you could ever need, not to mention gear you can borrow for parties. It can be a way of trialing toys that your children might like to own before parting with money for them.
Rethink streaming services
Whilst many of us enjoy snuggling up in bed to stream endless tv shows and movies, it is not a necessity. When the cost of living is making you rethink every decision around spending, this can be one to go. Can you watch free to air catch up TV rather than Netflix, or have just one streaming service at a time?
When you watch the shows that you want to, cancel and switch to another service. If you have Foxtel, perhaps you could downgrade to a cheaper streaming service instead. Can you get out your DVD collection (if you still have any) or head to the library to borrow some? For music, consider listening to the radio or Spotify Free, and stop Premium.
Use the library
Reading is a wonderful pastime but can become expensive. By utilising the library, you can try out a range of authors and genres. You can put books on hold from libraries around the state. You can borrow physical copies or ebooks. For those who are time poor, listening to books can be super handy. They can also become quite expensive. Libraries allow you to borrow audiobooks free on Libby or Borrowbox. If you haven’t already, download these apps and see what titles you can borrow today.
A great way to keep costs down is to shop secondhand. Op shops sell a huge range of clothes and shoes and often organise them by size. Money goes further on books, toys, linen and kitchenware, and you can often find a bargain in furniture too. Garage sales and listings on Facebook Marketplace and Gumtree all help to give items a new life. We reduce the impact on the environment by keeping old items out of landfill and not needing packaging and manufacturing for new products.
Join your local Buy Nothing group.
An easy way to combat the cost of living is to join your local Buy Nothing group. It’s a fabulous way to get to know other people in your area, ask for items that you need and pass on items that you no longer use. So many times I’ve almost made a purchase, and then stopped to ask my group.
More often than not, some kind person has one to give away and saved me needing to spend money. Other times I’ve almost thrown things away or put something in the donation box, not knowing if it would be accepted only to have someone so grateful for the item that they’d been looking for.
Switch it up
Being intentional with your finances doesn’t mean that you have to miss out altogether. Instead it might look like a potluck dinner with friends where everyone brings a dish rather than an expensive meal out. Having tap water, soft drink or juice instead of alcohol. Packing a picnic and bring a thermos to enjoy rather than buying food when out.
Buying frozen pizza or decorating bases to cook at home rather than ordering a pizza. Swap interstate or overseas holidays for camping and holidaying near home. Go with friends or family and split the cost of an Airbnb.
Utilise cooperatives & community groups
For those who are struggling right now, find your nearest cooperative. They often have meal packs at a fraction of the price of companies like ‘Hello Fresh’. They are genuinely cheaper than buying every ingredient seperately from the supermarket. Community groups, churches and charities can provide free bread, fruit and vegetables and hampers to those in need. Some hold soup nights or free meals. They are a great source of friendship if you are feeling isolated.
Reach out for help
If you’re really struggling and not sure what you can do or who to turn to, Scott Pape from the Barefoot Investor recommends giving the National Debt Helpline call on 1800 007 007. There you’ll find free, confidential counselling, there to help you figure a way out.
In closing, the rising cost of living in 2022 is pushing many individuals, couples and families to breaking point. It seems like every area of our life is getting more expensive with not much relief in sight. While these tips won’t solve the problem of how to stretch every last dollar, hopefully it is a starting point.
By reducing our expenses, negotiating better deals, saying no to the unnecessary and trying to live more frugally, we can get through this difficult season. By starting a side hustle or finding a casual job, we can reduce some of the financial pressure we find ourselves in and start to build up an emergency fund buffer. If life is really hard for you right now, please reach out for help.
There are many charities, organisations and churches equipped to help and would be more than happy to assist you. Alternatively, pop a comment or send us a message and I’ll do my best to point you in the direction of some help.