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Cutting back on ‘forgettable conveniences’, starting a side job and switching health insurance are just some of the easy ways experts say Australians can save money amid the cost of living crisis.
Borrowers were hit Tuesday with the ninth straight cash rate hike, putting more pressure on squeezed mortgage holders as the Reserve Bank tries to rein in inflation.
The cash rate rose 25 basis points to 3.35 percent as the RBA warned that further increases will be needed in the coming months to bring inflation down from 7.8 percent to 2-3 percent.
RateCity said the increases add up to an additional $908 a month in payments for the average borrower with a $500,000 loan since the central bank’s increases began in May.
For a $750,000 loan, the latest rate increase will mean an additional $114 a month or $1,362 since the start of the increase cycles.
But money experts, along with savvy Aussies who have boosted their incomes despite budget stress, have revealed their top tips for saving money.
Reserve Bank Governor Philip Lowe (pictured) leaves his luxury Sydney home on Tuesday on his way to announce the ninth consecutive interest rate hike for Australians.
Haggling is a thing in Australia:
CHOICE savings expert Liam Kennedy told Daily Mail Australia that many retailers have the discretion to reduce the cost of items.
“It’s not something that many of us do, but especially when we buy expensive items, like mattresses, for example, stores can negotiate,” he said.
‘Paying in cash also helps. We lower the price by 50 percent in some circumstances.
Narrow down the ‘easy’ conveniences you won’t miss:
HPH Solutions financial planner Matt Hearn suggested walking to pick up takeout food nearby instead of shelling out the extra money for delivery.
Even better, preparing food instead of buying takeout is a huge money saver, as is turning off electronics or the air conditioner when they’re not essential.
“Instead of having multiple streaming services at once, sign up and enjoy one service every three months,” he said.
“Consider replacing pricier fitness memberships with cheaper alternatives, or start exercising outside for free.”
While it may take a bit more effort, small changes like this can help Australians feel better about themselves and their back pocket, he said.
Home borrowers are paying hundreds of dollars more a month on their mortgages than they were a year ago (file image)
Take a side hustle:
Matthew Harsas, 31, from Kingsgrove in Sydney, works in pest control but recently joined Airtasker as a side job.
The main tasks of the father-of-one include doing maintenance work, assembling furniture and controlling pests, and he has achieved Gold status, which allows him to earn around $2500-$3000 every month on top of his other work.
“I have a mortgage and a family, and Airtasker allows me to generate additional income, which helps me cover mortgage payments with rising interest rates, bills and everyday life in general,” he said.
“It also gives me the flexibility to work when and where I want, and I get a lot of repeat clients and referrals.”
One advantage of rising costs is that wages, at least in the informal economy, have risen.
Airtasker’s Wage Price Index (AWPI) shows wage growth in Australia’s labor and service economy based on data generated by tasks completed in the app.
When comparing salaries between the first and last quarter of 2021, there was a 22 percent increase in salaries earned on the platform.
Wages not only stayed at this level in 2022, but increased another 9 percent over the year.
Rent your clothes (seriously):
Regina So, a 21-year-old student, works at David Jones and is in her third year of Economics and Marketing.
With rent, bills and purchases rising due to inflation, she turned to her wardrobe to help cover rising costs and college fees.
Regina turned to peer-to-peer luxury dress rental platform The Volte last and earns up to $7000 a month renting out her designer dresses, and has made over $30k in the last year!
“Everything is getting so expensive,” she says.
“The last couple of months have really exploded with people buying dresses for Christmas, New Years, weddings, events and holidays.
‘The money goes towards my college tuition, transportation, food, bills and rising cost of living, and I invest it back into the business. I love fashion and sales, so I combined the two and it’s really working.
“I’m a little girl with a big dream and I’d love to be able to do this full time once I finish college.”
Regina So (pictured) rents out her designer dresses on The Volte app and earns thousands a month
Don’t be on ‘autopilot’ at the supermarket:
“We tend to get into habits and buy the same items when we browse the supermarket aisles,” Kennedy said.
‘When shopping for groceries, pay attention to prices and keep an eye out for sales or special purchases on your favorite products or something you want to buy. Maybe even buy in bulk when it’s on sale.
“Also look at the unit price below the main price, this breaks things down and you can see where you’re getting the best value for money.”
“And buy cleaning product refills, this can save you up to 30 percent on each item.”
Parking spaces are in demand:
Salesman Zack Georgoulas, 18, from Brookvale in Sydney rents out one side of his double garage in Parkhound for $300 a month.
“I don’t have a car right now and my rent has gone up $350 since I first moved in, so I’m trying to cut back and save where I can,” she said.
“I used Parkhound to park in town before and also rented the spot at my last spot.”
I listed it last month and got a reservation within a few hours. Now I have someone there who has booked for the year and often works in the city, so it’s convenient and affordable for him to drive to the garage and then take the bus.”
‘It makes sense to rent out your underutilized assets.’
Think outside the (storage) box:
Due to rent increases and the rising cost of groceries, Andrew Woods, 36, of Collaroy in Sydney’s Northern Beaches is renting out his garage at Spacer.
The app matches those with free space with the people in need, and not just for cars.
He rents out the empty part of his garage for $350 a month to Mia Martens, who uses it as storage.
“Things are really tough right now and every dollar counts. My friend told me about Spacer and since I have a double garage with one car I thought I’d list it and it was booked within a week, it’s the easiest side hustle of all,” said Mr. Woods.
I have a lock box so Mia can come and go as she pleases. I’m even thinking of parking across the street and renting the other side.
Mia, who rents out the garage, said: ‘I recently moved and couldn’t take everything with me. Renting the garage means I don’t have to pay huge storage fees. I use it for working out and storing my couch and larger items. It’s next to the beach so I keep my surfboards there too.
Andrew Woods rents out his extra garage space to Mia Martens for $350 a month through the Spacer app so she can store her surfboards and workout gear closer to the beach.
See product reviews:
To avoid buying a fake product and wasting your money, Kennedy advises checking product reviews like those found on Amazon.
‘At CHOICE we test many household and everyday products and post the reviews on our site.’
“There are some dubious products out there that aren’t worth their money, and by doing your research you can avoid those pitfalls.”
Beware of buy now pay later apps:
Kennedy said these can be traps, especially for young people who can buy things without waiting.
He said that, as with credit cards, interest rates can be incredibly high if you don’t pay the money back quickly, and in the longer term, it can hurt your credit score.
Look for better deals on your monthly bills:
CHOICE recommends looking carefully for a better deal on your health insurance.
“Our research shows you can save up to $935 a year on hospital coverage by switching to a similar policy with a different provider.”
It’s also a good idea to consider changing or lowering your health insurance if you’re paying for coverage you don’t use.
This also applies to telephone, broadband and electricity bills. Compare prices, another provider probably has a cheaper alternative.