Offset inflation with better money habits
There is no denying that the cost of living for Australians is on the rise with inflation at 5.1%. But whilst we can’t control the cost of housing, transport and food, we can control our money. Managing money can offset the current increase in living expenses.
Here 5 things you can do right now to offset your cost of living
- Record your income and expenses – The first step to saving money and reducing your costs is to start recording what you spend. Use a simple app like Fudget or a simple money manager to easily record and track your income and expenses.
- Disposable income – Deduct your total income from your expenses to work out your disposable income.
- Set a savings goal – For example, if your disposable income works out to be $500 per month, you may set a goal to increase this to $1000.
- Work out your reductions to meet your savings goal – Take a look at your expenses and determine which ones are unnecessary or can be reduced. For example, you may have an online subscription that you never use or your car insurance might not be competitive and you need to change insurers.
- Take advantage of compound interest – Once you have successfully achieved your monthly savings goal, work out what to do with the extra money. Placing the money into a savings or investment account will grow your money over time by taking advantage of compound interest.