17 April 2024
1300 794 893

Under the cost-of-living pump? Try these 25 cost cutting tips

Peter Switzer
1 March 2024

The run of economic data is telling us that 13 interest rate rises and the impost of inflation that topped out at just over 8% at the end of 2022 is starting to tell on many Australians. In fact, Prime Minister Anthony Albanese’ broken promise about tax cuts was inexorably linked to his knowledge that the cost of living could change where he’s living right now in The Lodge, if he didn’t do something before next year’s election.
In fact, that poll could be later this year, if the PM’s economic number crunchers forecast that the news could get worse before it gets better.
Of course, many everyday Australians who are feeling the pinch the Reserve Bank put on us to kill inflation, really might not be able to wait for the July 1 tax cuts to kick in. They could need some relief right now, as the relentless repayment or rent demands continue to put pressure on their disposable income.
Recently, Gwen, a 2GB listener, bought my book Join The Rich Club after another listener called my colleague Ben Fordham to say how he spent the time looking at his spending and by looking for alternatives or asking for existing suppliers for discounts or reduced repayments he was staggered about what he saved.
I told Ben that my book addressed many of these smart money managing tricks that our listener listed but when Gwen went looking for it, they weren’t in just one area of the book! Apologising to Gwen, I promised to put it altogether in one of my daily pieces, so here goes.
I’ll call this my “how to KO your cost-of-living problem”, so here goes:
1. Create a plan to KO your cost-of-living problem. List all your hip pocket challenges and quantify them, so you know how much money you need to find to keep making your repayments or covering your rent. (This pressure won’t last forever but what you teach yourself in these tough times will be lessons you remember forever and will help you build wealth in the future.
2. Do a budget by putting your income and spending life on the lawn! See where you’re spending and work out what’s left. What’s left is called your savings.
3. Look at every item you spend money on and ask: do I really need to spend that money?
4. Look at every spending item and try to GST your life, to reduce spending by 10%. If you spend $50,000 a year and you can save 10%, that’s a $5,000 saving.
5. Reducing your home loan repayments by 10% might not seem easy but if you’re under the pump, go to your lender and ask for a rate cut. Also go to a mortgage broker or two or three and see what potential savings are out there.
6. Shop in cheaper suburbs because often prices are set to accommodate the consumers who live in that area.
7. Shop in businesses that are famous for price discounting, such as Aldi.
8. Buy in bulk. Maybe a trip to COSTCO is way overdue.
9. Shop with a list so you don’t stray and buy stuff you don’t really need.
10. Become an expert on Gumtree, ebay and other online buying platforms.
11. Carry cash and, where it seems appropriate, ask: “How much for cash?”
12. Ask your boss for a raise.
13. Switch jobs for higher pay.
14. Start a part-time business, which the Yanks call a “side-hustle”. Ever heard of Uber?
15. Convert the garage into an Airbnb studio.
16. Think about renting out a room to a student.
17. Go to a tax agent and make sure you’re getting all the tax deductions you’re entitled to.
18. Have a garage sale and get rid of valuable stuff that is collecting dust in your garage or in a cupboard.
19. Sell your car and buy a cheaper one.
20. Sell your car and start using public transport if it makes money-saving sense.
21. Sell your house and pocket the capital gain.
22. Move in with the parents and rent your house out to bolster your cash flow.
23. Capture the tax benefits of negative gearing when you go from being a resident of your own home to a landlord, who lives with parents.
24. Rent your house out and move to a cheaper suburb where the rents are lower than the rent you’ll receive from renting yours.
25. Get a loan from the bank of mum and dad!

There are 25 ideas that someone should consider to get through the challenges of the current spike in the cost of living. Clearly, many of these ideas could be insufferable to many Aussies, but in desperate times you need to be able to do desperate things. And as I always say, if anything’s worth doing, it’s worth doing for money. And there are other great sayings, such as “when the going gets tough, the tough get going” and “if nothing changes, nothing changes.”
The high achievers of the world think and act outside the square and many of my 25 ideas could seem horrible options under normal circumstances, but many Aussies could be living through abnormally tight times so being innovative, as well as open to ideas that ordinarily you wouldn’t even consider, might be the best line of action.
Gwen, I hope this helps either you or the family member or members you wanted to help.
Here’s one last bonus idea: make sure you or the people you’re trying to help read the whole book of my book Join the Rich Club. It was written to help Australians get richer through knowledge, and as the US actress Sophie Tucker once said: “I’ve been rich. I’ve been poor. Rich is better.”

Get the latest financial, business, and political expert commentary delivered to your inbox.

When you sign up, we will never give away or sell or barter or trade your email address.

And you can unsubscribe at any time!
1300 794 893
© 2006-2021 Switzer. All Rights Reserved. Australian Financial Services Licence Number 286531. 
shopping-cartphoneenvelopedollargraduation-cap linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram