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We’ve all heard about and experienced rising prices and living costs.
Items that seemed relatively inexpensive a few years ago, suddenly seem out of reach for many people.
Petrol, power, groceries- all those essentials are suddenly placing more of a burden on our household budgets than ever before.
And it’s not just your imagination, energy, education, housing and groceries are pushing families deeper into debt, according to the latest ABS Household Expenditure Survey, Australia 2016-1611.
The survey has found that:
- Australian household spending on goods and services increased by 15 per cent between 2009-10 and 2015-16, going from an average of $1,236 per week to $1,425.
- The goods and services that Australian households were spending the most on in 2015-16 were current housing costs ($279 per week), food and non-alcoholic beverages ($237 per week) and transport ($207 per week).
- Average weekly spending on goods and services was highest in the Northern Territory and Australian Capital Territory ($1,700 and $1,670) and lowest in Tasmania and South Australia ($1,141 and $1,192).
Meanwhile, many Australian cities have become more expensive to live in than other cities around the world, according to this year’s Cost of Living Index
And Sydney is Australia's most expensive city, rising from number 41 to number 32 in the world in the yearly index that is compiled by price aggregation website Numbeo.com.
Other Australian cities that rose up the list are Melbourne, moving from 77 to number 64, Adelaide that now sits at number 58, Cairns that is number 69 on the list, Hobart that is in the 82nd spot, Canberra which is the 103rd most expensive city in the world.
The only Australian cities to become cheaper with time, according to the index are Perth that sits in position 56, Darwin in the 68th spot and Brisbane in the 93rd position.
“While most people don't want to go to the trouble of switching, remaining loyal to one insurer or energy provider is no guarantee you’re onto a good deal."
Australian financial expert and commentator Noel Whittaker says families can get help to manage the rising costs by getting into good savings habits and using tools to help keep costs down, including petrol pricing apps and savings websites.
Doing an annual stock take of your outgoing fixed expenses and putting money from every wage aside to cover these costs is another tip from Mr Whittaker.
He also advocates putting aside small amounts of cash every day, including loose change that you might not otherwise miss.
“I like piggy banks and think they are one of the great savings tool,” he says.
Small and consistent daily savings could go a long way, he says.
“If you invest small amounts you can then sit back and let the compounding interest work its magic,” he says.
When it comes to our fixed household costs, which are often the ones causing the most headaches, experts suggest shopping around for better deals.
CHOICE Head of Media and Spokesperson, Tom Godfrey says remaining loyal to one company is not necessarily a guarantee you’ll get a good deal.
“While most people don't want to go to the trouble of switching, remaining loyal to one insurer or energy provider is no guarantee you’re onto a good deal,” he says.
“Service providers will often offer you a better deal if you threaten to take your business elsewhere, especially in highly competitive markets like telcos.”
He recommends reviewing your current needs and spending habits and then shopping around on comparison sites.
“Write down the details of the best deal available for you including the name of the provider and rate on offer and if your current provider can't match a better offer, it might be time to switch,” he says.
And beware the “lazy tax.”
“The best deal today might not be the best deal in 6 months so be prepared to switch again,” he says.
Tips to help you switch
- Always independently compare prices
- Confirm the new offer in writing
- Cancel any direct debits you might might have with the old provider
- Make a note of any introductory offers, reversion rates or other time bound requirements
- Beware commercial comparisons that rank offers by the commission they receive and not the best deal available.
- Ensure the comparison site has comprehensive market coverage and isn’t just displaying businesses they have a commercial relationship with.
- The best deal today might not be the best deal in 6 months so be prepared to switch again and avoid the lazy tax.