How To Reduce the Impact When Interest Rates Rise

Interest Rates rising are daunting for almost all households. Let’s face it, the cost of living is already impacting so many Australians. Coupled with interest rate rises month after month, adding more pressure to our family budgets.

The Reserve Bank of Australia has taken a break on rate rises at the time of writing, however that hasn’t put much ease into the minds of everyday Aussie’s who are wondering if there is another rate rise around the corner.

Unfortunately, we’re unable to control the Inflation, Rates and Bank Rates in our everyday household, but what can we do to protect and safeguard our way of life when the cost of living is spiralling out of control.

Working in finance the last 16 years hasn’t stopped the cost of living impacting me either. So I have compiled a list of things that I do regularly to ensure that I am keeping across my budget and family spending.

There are many budgetting sites available around. I like to use the Money Smart Budget Planner as this is a safe government site.

It’s a live file that you can update as you go, easy to use and breaks your budget and expenses into Weekly, Fortnightly or Monthly costs. It then provides an annual surplus or deficit. We can only improve our budgets if we are honest with what we are entering into the budget planner. I am guilty of putting $0 into takeaway boxes, when I absolutely almost always buy some form of takeaway.

Reviewing Expenses

After carefully scouring my bank statements, I consider what are needs and what are wants. This helps me review my actual living expenses versus discretionary expenses. Consider cancelling the one too many TV subscriptions we all have, finding a lower priced internet provider, reviewing your insurances more than annually and paying costs annually can sometimes reduce the overall cost too.

Surround yourself with great advice

Having a great Mortgage Broker (me) in your corner can mean you have someone keeping an eye on the market for you, asking your bank for rate reductions and generally keeping a good eye on the finance side of your costs.

Speaking with your Financial Planner about how you can use surplus cash to expand income streams is another way to generate some additional income.

Using a great tax accountant can ensure you are claiming all that is available to be claimed at Tax Time.

We use an Insurance Broker to assist in helping us save time in researching Insurance Policies. Insurance is one of those things you hate to pay for, look around for the cheapest option but wish you had the best cover if something happens.

For us, Insurance is about quality over price.

Check your Subsidies

Are you receiving the right childcare subsidies? This is important and those daycare invoices make little to no sense every time I read it! Recently, a review of my daycare invoices vs what was being paid by child care subsidy found that I had overpaid my childcare fees by $1200. It was over a long period of time, and the invoices were not matched to the CCS Subsidy due to an error.

Carefully monitoring your expenses and checking your benefits is important too.

Checking if you are eligible for any grants or funding

There are many government grants available to families, including Transport to School subsidies and alike. If you haven’t checked recently, do a review of any available grants to see if you are eligible.

Utilise Bulk Buying and Sharing if Possible

There are many ways to reduce the grocery bill. Bulk buying with family can help reduce the overall cost of grocery bills if you have someone to share the costs with when buying in bulk.

Check your Electricity Provider

Checking in to see what electricity providers are offering is a great way to save some utilities costs. Sometimes you will find that your existing provider comes back with a better offer to keep you. Some providers offer incentives to change over to them! We recently received a better energy plan AND 70,000 points towards our grocery shopping by using our Everyday Woolworths rewards to find a new energy provider.

Speaking of Points

Flybuys, Woolworths and other cash back rewards programs can be very easy to use, only if you are buying what you need. Points programs are a great way to earn something extra for your everyday expenses. We save ours for Christmas and have a little extra in the Christmas fund at Christmas time.

Offset your Home Loan

Some lenders off Offset Accounts (or redraw) and having all your funds sitting in here saves you interest on your mortgage. All too often, I see clients with 10 accounts and hardly any of their funds offsetting their mortgage as they like to have seperate accounts for their bills. Whilst this is a great way of budgetting, it is not doing you any favours for saving Home Loan Interest. If this is your way of budgetting, consider changing your home loan to a lender who offers Multiple Offsets so you can get the benefit of split budgetting accounts that ALL offset your mortgage.

Stop Paying Annual Fees

Asking your providers to consider waiving annual fees can assist in saving some money. Be prepared for a no, but if you don’t ask, you won’t get.

If you have any more great savings tips, be sure to add them to our “enquiry page” so we can add them to the blog and share other great savings tips with our community.