As the Reserve Bank of Australia announces official interest rates will rise to 0.35 per cent financial experts are advising savvy Australians on where they can “trim the fat” in their households to save a few dollars.
“A lot of Australians haven’t had pay rises in maybe up to 10 years and with the cost of living rising so quickly, a lot of people are feeling a lot of financial pressure,” said Scott Haywood, The Finance Guru. A Current Affair reporter Sam Cucchiara.
Already feeling the pressure, young parents Sophie Bernard and John Collins had to delay their wedding in order to save for their first home.
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“We’ve had to choose between either buying a home or planning a wedding, because it’s a luxury that we just can not afford,” Ms Bernard said.
“So we’ve decided that a house is definitely something that we need for our family.”
The couple, together with their 18-month-old daughter, August, moved in with Ms Bernard’s mother to save money.
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Despite paying less in rent, they said they are still finding it difficult to build up their nest-egg.
A Current Affair called in Mr Haywood to offer some advice.
“It’s like getting your car serviced. Look under the bonnet, see where you’re spending the money and see where we could make some improvements,” Mr Haywood said.
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“We’re probably spending, it’d have to be close to $ 100 a month on streaming services. When you add up your Netflix, your Stan, Binge, Spotify, Amazon, Paramount +,” Mr Collins said.
According to comparison site Finder, 88 per cent of Australians are subscribed to at least one streaming service.
Finder’s research also found it would cost the average Australian $ 146.93 a month – equivalent to $ 1763 a year – to subscribe to all major streaming services including Netflix, Stan, Disney +, Apple TV +, Foxtel Now, Amazon Prime Video, Kayo Sports, Paramount +, Binge , YouTube Premium, and Optus Sport.
“In a rising interest rate environment, everyone’s going to be paying more for rent and for their mortgage sooner rather than later,” Mr Haywood said.
“So it’s worth assessing whether those subscriptions are still worth keeping.”
Mr Haywood also recommended reviewing any direct debits, checking for any unused services that may be slipping through each month.
“I’ve looked at my bank statements and I saw $ 69 come out of my account from a gym that I haven’t been in about three years,” Ms Bernard said.
“I keep forgetting every single month and then I look at my bank statement and another $ 69 has come out.”
Mr Haywood estimated the couple could save up to $ 20,000 over the next 18 months by taking into account their current living situation, following their budget and making a few trims.
“My goal would be: Cut your streaming, cut your gym membership,” Mr Haywood said.
“Look at other ways you can save on regular expenses, such as your insurance. Keep maintaining your budget as you are.”
Given the current annual inflation rate of 5.1 per cent, Mr Haywood said some Australians may need to think creatively about how to add money to the bank.
“It’s either – earn more income, start to look at your budget and cut expenses – or the X Factor is to maybe look at a side hustle to try and add in that extra income,” Mr Haywood said.
“Maybe doing a course on the side to try and improve some skills that might put you into a job that you can do yourself, maybe from home.”
The first step is to see what items around the home you could sell.
“A good start could be to declutter some of the clothes you might not be wearing as much as you used to,” Mr Haywood said.
“That little bit of extra money could go towards your savings and get you in a home sooner.”
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