Managing your family budget

There is no doubt that the rising cost of living continues to make life challenging when you’re trying to manage your household budget. While it can certainly be a balancing act between affording the basics and having some left over for what you really enjoy here are just a few things that you can do to help reduce the impact of inflation and price rises.

Shop around

For ongoing expenses like home loans, bank accounts and mobile phones, the choice that’s available means you’re able to use this competition to your advantage. Talk to your bank about getting a lower rate on your home loan or perhaps no monthly fees on your bank account.  Even a small reduction in these could save you a considerable amount of money over the long term. The same goes for your home phone or mobile phone – there always seems to be a better deal available than what you’re on now. Talk to your provider and you might be surprised about just how much you could save.

And if you’re renting, offering to sign an extended lease for the same or lower rent than what you’re paying now could help you to beat any future price rises. Landlords love good tenants and this provides them with longer term certainty, while saving you money.

Change your bill cycle

Large bills like electricity, council rates and water can place a huge strain on your budget, especially as more companies move to a ‘lower fixed cost-user pays’ model.  Rather than having one of these large amounts break your budget start by working out how much all of these cost you each year. Then divide this by 12 and pay this smaller amount into a high interest savings account each month when you get paid.  That way, when each bill arises, you’ll have the money sitting there ready to pay it.

You can also check to see if your utility provider offers ‘bill smoothing’ where you pay a small, known amount each month to cover your utility costs for the full year.  This can also help you to manage your cashflow and avoid any nasty surprises.

Pay upfront

While many people choose to pay for expenses like health insurance monthly, did you know that you can save money by paying upfront? Many insurance providers offer a discount for paying your annual premiums in advance which may help you to avoid any monthly transaction or direct debit fees. If you use public transport to get to work, consider buying your travel ticket quarterly or yearly, which generally works out cheaper than daily or weekly.

Check the benefits offered by your employer as some allow you to salary sacrifice the cost of your daily travel ticket. Having this expense come out of your gross salary will help your net cashflow.

Start a savings plan

Setting up a regular savings plan will help you to protect against future price increases in what you buy so you aren’t caught short in an emergency.  Ideally, you should try to have at least three months’ worth of living expenses that are easily accessible which you can use to fund any shortfall in your regular bills or pay for any unforeseen emergencies.  Arranging direct debit into a high-interest savings account is very easy, and you’ll be surprised just how quickly your balance will increase.

Staying on track 

Having someone to help you with your household budget can give you peace of mind, through knowing that you’re making the most of what you earn.  It is important to remember that, even though you are on a budget, you need to have some fun so your budget should be flexible enough to meet your expenses but allow you to enjoy your life as well.  A financial adviser can suggest a range of strategies to help you stay on track and afford those little luxuries that you enjoy.

To find out more, please Contact Us.

RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429.

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