Millions of Australians are hurting due to the increasing cost of living and rising interest rates.
The 1.8% rise in prices in the June quarter pushed annual inflation to 6.1%. The price of groceries, bills and other essentials continues to rise.
In an effort to combat inflation, the Federal Reserve recently announced another three-quarter of a percentage point increase in its benchmark interest rates. This is the second such increase in just over a month, putting additional stress on homeowners.
Times are tough and it isn’t getting any easier! So how can you ease the pain of financial stress?
Review your budget
With the cost of living skyrocketing, it is likely that your budget has changed over the past twelve months. Take some time to review your expenses and what has increased since your last review. You have probably noticed an increase in the cost of groceries, bills and your rent or mortgage repayments. If your income has changed, review how this has changed relative to your expense changes and how this has impacted your buying power.
Assess whether you need to make any lifestyle changes to ensure that you are not putting yourself under financial stress. This may mean cutting back on takeaway coffee during the week, subscriptions that aren’t being used or shopping that isn’t necessary. Cutting back is also a great way to future-proof yourself for any future increase in the cost of living and rising interest rates.
Consider refinancing
Those experiencing financial hardship may be able to negotiate a lower interest rate. If you have no luck negotiating with your current bank or lender, you may choose to consider refinancing. During times of increasing interest rates, it is always worthwhile shopping around to see if you can find a better offer. A Mortgage Broker can support you to secure a rate that will give you more breathing room for your repayments.
Put your savings into a high interest account
Make the most of higher interest rates if you are in a fortunate position of having savings in the bank. If you have savings that are sitting in an everyday bank account, it’s time to make smart moves that will help you save more and save faster.
By moving your savings to an APS Term Investment, you could be earning up to 4 per cent per annum on your savings. You will be saving more without having to move a finger!
Seek financial support
If you are struggling to keep up with increasing costs and rates, we recommend speaking with a financial advisor who will be able to provide you with trusted advice. Seeking support from an expert will give you peace of mind that you are making the right decisions to protect yourself now and in the future.