Aussies are feeling the pressure on the increasing cost of living

If it feels like you’ve been spinning your wheels financially lately, you’re not alone. The latest ABS data shows that many Aussie householders are feeling the pinch.

Weekly budgets are being stretched to the max to cover basics like food, housing, energy, healthcare and transport, leaving very little leftover for anything else. In fact, the good people at the University of Melbourne estimate the average family now needs to earn at least $50,000 a year just to cover the essentials.

This estimate is based on a couple with a mortgage (or who own their own home), have a single vehicle, and children attending a public school — like mother-of-two Nicole who told us that these days she has to mentally psyche herself before opening her bills.

“I take deep breath and brace myself”, said Nicole. “I’m pretty good with budgeting and I’ve always been able to stash a bit away but these days it pretty much all goes on the bills. Everything seems to have gone up. Power bills especially are just ridiculous.”

Ridiculous indeed, and here’s the kicker: combined gas and electricity costs have actually surged so high across the country that hundreds of Aussies are being disconnected every week simply because they can’t afford to pay their bills.

Fortunately the Federal Government recently had a stern word with Australia’s eight biggest electricity retailers in the hope of influencing (read: lowering) prices. While prices haven’t come down they did reach an agreement that Aussies will now be warned by power companies when their discounted electricity plans are about expire, potentially saving householders more than $1000 a year.

Laura Crowden, spokesperson for iSelect Energy, welcomed the agreement but cautioned against waiting to hear from your retailer before seeking out a better deal.

“Don’t just set and forget when it comes to energy prices”, she said. “Take the time to speak to an energy expert and make sure you’re getting the best value. If you aren’t, then it’s time to switch to a different provider offering a more competitive rate.”

Shop around for a better deal

Sound advice but don’t just stop at energy providers. Shop around for a better rate on your home loan and any insurance you have as well, be it car, health or home.

Don’t fall into the trap of just automatically renewing or accepting the status quo.

Pick up the phone or compare your energy online, play hardball and make sure you’re getting the best bang for your buck.

Take control of your finances

One of the best ways to save a bit is to make sure that you have a budget.

Yes we know: budgeting is about as fun as a slap in the face with a wet fish, but most of the experts agree that if you don’t know where your money is going, it’s pretty tough to take control of your finances. Reviewing two months’ worth of transactions is a good start but there are other options too.

More top money-saving tips if you’re feeling the cost of living pinch:

• Change one habit and save. Small changes can make a huge difference – rethink buying that second latte, borrow library books and DVDs, cancel that magazine subscription or gym membership.
• Save on food. Before heading off to the supermarket make sure you’ve used up everything you possibly can at home. If you do still need to go, make sure you take a list (and stick to it). Oh and don’t go hungry!
• Speak to one of our qualified advisors. Get in touch with the team at iSelect who can help you save money on all life’s essentials from health insurance to credit cards to power.

iSelect does not compare all products in the market. Any advice provided in this content is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product.