At the time of writing this, Australia, and the rest of the world, is experiencing high levels of inflation and other costs of living pressure. This has meant many people are struggling to afford to shop, put fuel in their car, or buy basic things. Let's look at some of the best ways to save money for shopping, living as well as having fun.
More & more people's wallets are looking like this by the end of the week (image courtesy of csamhaber @ pixabay)
There are many reasons for inflation. Generally speaking, in a growing economy, prices will go up. If your wages are not going up with the price of items then you are essentially getting a pay cut.
Globally prices are on the rise (courtesy of geralt @ pixabay)
The classic cause of inflation is money supply. In modern economies it is not about printing money, but about the interest rates charged on loans. If loans are cheap, it stimulates the economy, but if the economy is overstimulated, then inflation gets out of control, so the government raises interest rates to keep growth under control.
But other factors influence prices as well. Increased demand can push up prices as can reduced supply. We might also see a shift in consumption patterns. Prices might rise in one area and drop in another because consumers focused on particular areas.
Another issue is the exchange rate. With quite a lot of things being imported, especially many of the cheaper items, when the Australian dollar loses value the price of a lot of things goes up. Basically, it is because the money in your pocket is worthless.
At the time of writing this, inflation is mostly caused by everything but money supply in the traditional sense. In fact, reducing money supply would make it harder for companies to increase production or fix supply chain issues, driving up inflation. However, house prices are on the rise, because loans are cheap, meaning people can borrow more. But house prices have risen because people saved more money recently and the supply of houses on the market is fairly low.
We are part of global supply chain that has numerous problems that are driving up prices (image courtesy of Tumisu @ pixabay)
Instead of money supply, we have seen global disruption to supply chains, a falling Australian dollar, changes in what people buy, as well as other factors, including war. It is a perfect storm that will take years to return to normal. So instead of waiting for others to fix the problem, we have to adapt.
Food cost-saving tips
Food is often the most pressing issue for many people, and as food prices rise, the cost of what was an ordinary meal could be a stretch now. For parents, especially parents of young kids, it can be a struggle, because not only do they need to make nutritious food, they have to get their kids to eat it as well.
Where you shop can matter, but it is not as simple as switching to Costco or Aldi, though you could save 10% to 20% on many commodity items, and some of Aldi's luxury items are much cheaper than anything at Coles, Woolworths or IGA. But shopping where the prices are lowest can be a good idea.
For fruit and vegetables,
the markets are often one of the best bets. Yes, I know, farmers' markets have become the place of middle-class people looking for overpriced organic produce or specialised items, but turn up about an hour before the market closes, and there is likely to be at least one stall selling off their fruit and vegetables cheaply. Not only are you saving money, but you know you are buying what is local and seasonal as well.
Shopping at the markets can save you money on fruit & vegetables
Don't forget
specialist supermarkets. There are certain items, such as lentils and dried beans, that I can get from my local Indian grocery store for much less than other supermarkets. Then your discount stores also sell food, so they are worth checking out to see if they have anything on special.
But the real trick is
how you shop. That is, plan your shopping and your meals around
what is on special. I used to know someone who would scour catalogues for the best deals and shop accordingly. If things are discounted, then buy them in bulk or buy them in advance, but even if they are not, buying in bulk can be a big saving. The bulk buying advantage is sometimes referred to as the poor tax. When people don't have a lot of money, they can't afford to buy the jumbo size pack of anything and end up paying more for items.
You can save a lot of money by making the right choices in the supermarket isles (photo courtesy of Indiana Stan @ flickr)
What really matters though is
what you eat. You can save more by choosing the right types of foods. Pasta is a family favourite in Australia and is naturally cheap. You can make it cheaper and healthier by adding beans and vegetables. But there are lots of other cheap dishes you can cook. This includes the US favourite meatloaf to the Chinese eggs and tomatoes dish. Not only can these types of foods save us money, but as they are low on meat and high in vegetables, so they are healthy for us too.
Processed items can be replaced by
making things from scratch ourselves. This is especially true of junk food, which has way too much sugar and is overpriced for what they have in them. While it can take time, people who have some time on their hands can make their own biscuits, muffins, cakes and bread. You know what is in them, and that often means less or no sugar. They can also taste better because they are nicer. But the real advantage for some people is the money saved.
Don't forget to
meal prep for the week. We tend to spend more by buying pre-made sauces or even meals because we are tired at the end of a working day. So cooking ahead and reheating your food saves you money and time. I even know people who saved a lot of time and maybe some money by switching to pre-cut frozen Asian vegetables for stir-fries so they don't have to chop them themselves.
We can also mix it up. Remember to
Feast in times of famine . Have a diet that is both cheap and healthy can be boring. So, just like they did in Medieval times, or people on many diets do, have a feast or cheat day. This is the day you splurge on delicious food, especially with friends and family. I know I always get the good stuff when I have to cook for friends.
General shopping tips
Beyond food and rent, there are still a lot of things we need to buy.
Bargain hunting is one of the key ways to buy things. That is, never buy anything that isn't on special and choose the right specials for the best discounts. Essentially this comes down to knowing when the sales are and buying what is on special now, even if you don't need it until later. For me, it is often about sports and hiking shoes. If I see them on special I buy them now, even if my current shoes are still good for a few months.
There are ways to shop on a budget
Again, it also comes down to what you buy, not just when you buy it. During hard economic times, people actually buy more expensive items, because they buy something that is hard wearing and has a classic look. But of course, they buy less of them. So stick to the classic look for clothes, bags, shoes and so on.
One temptation is to buy second hand, and this can be a good deal. But do your homework on prices and look for false economies. For example, if you buy a new fridge with a good energy rating, it will save you money on electricity, making it cheaper in the long term than a second hand fridge. It will also have a warranty and generally last longer.
But for things you don't use often, secondhand deals make a lot more sense. It is important to research to make sure it is a good deal. Sometimes it is better to get something new.
Transportation cost saving tips
Fuel prices just keep seem to be going up, and as renewables take over, we can expect fuel prices to keep going up, as fossil fuel suppliers get out of the market. Of course, you could buy an electric vehicle. In Australia though, there are no low priced electric cars. Often the people who need to save money on fuel can't afford to go electric.
Many people are just looking to downsize. A smaller town car can save you money on petrol and a lot of people are getting interested in motorbikes.
We can of course switch to alternative methods of transportation. Cycling is good, and electric bicycles make cycling easier. But a lot of people prefer electric scooters as you don't have to do any effort at all. But these are all good mostly for shorter trips in good weather.
There is always public transportation, but the problem is that most people don't just need a car to get to work. Then taking kids to school, shopping and recreational activities are limited without a car.
But that doesn't mean that we shouldn't just sell our car completely. Many 2 car families don't need one if they do a little planning. If you work in the city centre, live near shops and recreational activities, you can find that, dropping the car and just using ride shares or taxis ends up cheaper in the long run. Of course, this doesn't work for everyone.
One of the best ways to save money on transportation is to drive less. Do we really need to drive across town when there are things to do in the local area? Do we really need to drive ourselves, when our friend could pick us up? Want to go for a trip to the mountains, invite friends to share the fuel costs (or make them pay for lunch, my friend always makes me do that, and I think they are getting the better deal out of it).
Housing cost saving tips
One of the biggest expenses in Australia is housing. But many people are finding themselves priced out of the housing market. There are ways around this though.
More and more people are returning to living in share accommodation. Houses and apartments are usually built for families, so finding accommodation for one person is not easy. More and more older people are seeking out share accommodation.
Housing costs are one of the main pressures people are facing at the moment (image courtesy of AlexanderStein @ Pixabay)
If you have your own place, then you can always rent out a room or two. Do it fairly and the process can be nice, but those who are always complaining about their flatmates are usually the type who charge 1/3 of the rent for a room in a 3 bedroom house, then refuse to let them use the living room, complain when they use the kitchen, and don't want them to invite friends over.
When it comes to housing affordability, some people are now choosing to buy a property with friends. This can even include 2 families living together in one large household. Not sure how well this works out, but it is often some people's only way into the housing market.
A lot of savings come from where you live. But this can be a false economy. In many cities, the outer suburbs have cheaper accommodation, but also fewer shops and amenities. So you have to factor in how much more you will be spending driving when you live in some place cheaper. Residents of the outer suburbs often find it harder to find work, as more jobs are closer to the city centres.
Fun & Weekend Activities
Life can't just be work and paying the bills, you need some budget fun too. Okay, there is a lot you can do in Australia for little money. Going to the beach, hiking, camping and so on are pretty cheap. Though with fuel prices going up, anything that requires a journey by car might be outside of some people's budget.
Image courtesy of fancycrave1 @ pixabay
Often though, there are plenty of free or cheap activities on in every city in Australia. Look at websites, like Weekend Notes, for information about what is on in your city. These include huge concerts through to local community events. Overall, these can be a cheap night out.
Then of course, you don't need to spend a lot of money to have a good time in your local area. Organise a barbecue with friends in your local area, hike in a local bushland area or look for free sports facilities for some fun and games.
Budgeting
For many people, the issues around money come down to budgeting. They run out of money when it comes time to pay the rent or put food on their kids' plates. But this is happening, not because they lack the money overall, but they spend it in the wrong ways.
Budgeting doesn't have to be complicated to help you save money
Budgeting isn't the solution to all problems, and it isn't a solution to prices going up, wages staying stagnant, loss of income or sudden expenses. But it can help make sure you are paying everything that has to be paid on time. This applies whether you have a fixed income or, as many people now work variable hours, an income that changes all the time.
There are lots of budgeting techniques, but the most common is to set aside money for things you need to pay regularly like rent, mortgage. phone bill, Internet, electricity. Many of these things are monthly, while pay is often fortnightly, so you if you don't set aside that money now, it won't be available.
From the remainder, you can set aside money for shopping and savings. Then that leaves the rest for fun, unless you have a specific goal, such as saving for a new car, fridge or holiday.
Earning more money
Often the only way to offset high prices and stagnant wages is to earn more money. It seems that these days many people have a side hustle. In fact, many people only have side hustles after finding that this makes them more money than a regular job.
Some basic ideas, including, writing for Weekend Notes, driving for Uber, Lyft, Deliveroo or rent out a room in their apartment on AirBnB. You can also pick up odd jobs on sites like Airtasker or Freelancer. Someone needs a trailer to move things. You have a trailer, you turn up, they put it in the trailer, they give you money. Others do design work, write code, do cleaning jobs or, well any task that can be done.
People also do all sorts of side businesses, such as selling things online, selling things at the market and so on. Some people even go and knock on doors selling items. I met a guy making good money installing those door peepholes by knocking on doors.
There are also apps and websites where you can earn money doing various things, such as playing computer games or taking surveys. Maybe this is not a lot of money, but if you have time and would like an extra $20 for groceries, it can be good.
What the government can do about inflation and help people save money
Some people, especially in the US, like to go "Why doesn't the government just fix the problem." Expect the problem is not caused by the government and the government lacks the power to directly solve the problem. But that doesn't mean that the government can't do anything about it.
Governments can actually do a lot though and we should pressure governments to take action. Housing is a big problem, and the cost of housing is related to the availability and suitability of housing. Many places facing housing stress actually simply have not been creating a enough housing for a growing population and often lack a solution for when the housing runs out.
But there is a lot more governments can do. The hidden costs of schooling kids hit many families, as well as the rising cost of healthcare means that even though everyone has Medicare, not everyone can afford the pay the gap between Medicare and the much higher real cost of healthcare. Many parents are having to choose between working while paying rising childcare costs or just staying home. The list goes on.
Overall
There are lots of ways to save money, and while it is not the solution to fundamental social injustices, it can mean putting food on the table for some people or being able to save up for something like a holiday or a deposit on a house. Would love to hear other people's money saving tips as well as cheap ways to have fun on the weekend.
