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Budgeting tips following another rate rise

24 February 2023

If we can speak on behalf of Australians everywhere right now — we're officially done talking about rate rises. While it's tempting to cover our ears and hum, it's important we're proactive with our finances right now. Plus, budgeting is always a good idea whenever, and whatever your financial circumstance. We've rounded up our top five budgeting tips to help better empower you through yet another rise in interest rates.

1. Prioritise
If you’ve started a budget in the past but never really seen it through, now is the time to get serious about money management. Remember, starting (and sticking to) a budget doesn’t have to come at the demise of your social and spending life.

Write down what’s important to you. Health is a key one for most, so that weekly charge from the gym (assuming you actually go) could be a non-negotiable.

Rank your priorities in order of importance, starting at the top and working your way down. So it might look like:

If you’re a parent, your bigger expenses might look like school fees, health cover, groceries and extra-curricular activities. If you’ve established health is most important to you, perhaps some of the extra-curricular activities can be put on the back burner for the time being — especially if some of those activities are being covered in a school day anyway.

These aren’t always easy decisions to make, but prioritising what matters most will help you see the bigger picture when it comes time to scaling back.  

2. Be realistic
Remember, you’re allowed to have fun and socialising often involves spending money. If you save your takeout or dining out for social and work catch ups, rather than say ordering Uber Eats mid-week, you’re going to notice a difference in your weekly balance.   

Takeaway coffee is another one of those seemingly small expenses that cost us big time. The average hipster coffee is around $5-6. Order one a day, over a Monday to Friday work week and you’re around $1,500 out of pocket a year. Sometimes it’s those little treats that keep us sane, but bringing your coffee from home just a few times a week will add up in the long run.

3. Practice money mindfulness
That little shot of dopamine you get when the cashier hands you your shopping bag is a high most of us know well.

Mindfulness might feel like a woo woo term straight outta Byron, but it’s an important tool for keeping our spending in check. Spending money for the sake of spending money is something most of us have done and we’re often unaware of it.

Have you ever walked into Aldi for some grapes and come out with two kilos of epsom salts and an air fryer? And forgot the grapes?

Retailers know what tempts our spending habits and thanks to product placement and clever visual merchandising, it’s difficult to walk down the aisles with our blinkers up.    

Simple tricks like shopping for groceries online helps you stick to your list. You’re less likely to grab things on an impulse and it’s easier to see what you’re spending with your receipt tallied as you go.

Really ask yourself why you’re purchasing something and if you’re unsure, pause and go back to it in a few days after you’ve had time to reflect. Will you still be happy with your purchase in a month, or a year? Are you buying it out of boredom, or will this item genuinely make your life better?

4. Research
Be proactive in checking (and re-checking!) that your bank is giving you the best bang for your buck — so, things like your mortgage interest rate and account keeping fees. Likewise check your insurance policies regularly to ensure you’re fully covered for what you need, at the best rate possible. Don’t be afraid to negotiate a better deal, and if your lender or insurer can’t offer it, be proactive in comparing their rates to their competitors. Comparison sites like Lendi and Compare the Market can help you there.  

5. Remember
While it’s great to keep a budget, whatever your financial situation, a tight budget doesn’t usually mean forever. Set yourself a goal, and work towards that. So, it might be a family holiday, or just greater financial stability, but remember you’re working towards something bigger than just missing out on a takeaway coffee today. Look forwards and remember your long-term goal.

Click here for more information on our services or you can contact us via our website or call 1300 829 536.

This article is for general information purposes only and is not intended as financial product advice. Consider seeking independent financial advice that relates to your individual circumstances.

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