It’s about everything we need our dollars to cover. From everyday necessities like a bag of cheese to holidays, healthcare, transport and childcare. Your perspective usually dictates whether an item is essential or discretionary, noting that life events such as Covid, changed how many of us valued things like toilet paper and school attendance.
So, putting aside tonight's dinner choice (we recommend the Coles $10 BBQ chook), let’s shed some light on dollar despoilers and turn them into money-makers.
It's a haggler's paradise
Haggle with your lender for a better rate. Even a o.5% reduction can save you hundreds per month. Log into Otivo to see exactly how much.
This is especially important if you’re on a fixed-term mortgage that’s ending soon, and the revert rate you automatically roll onto could be triple what the fixed rate was, meaning repayments go up by a lot.
If you need more extreme solutions, two options are switching to interest-only repayments or extending the life of the loan. Both reduce repayments which helps with cash flow management, but come with long-term pain by increasing the loan costs, especially when the interest-only period ends and the principal kicks in.
How low can you go?
Increasing costs for things like insurance, health cover, electricity and gas have been felt the world over, putting additional financial pressure on households.
If the price isn't right, shop around for a better deal. There are several websites you can use to compare these with, making change that much easier. Check out sites like Finder, iSelect, Canstar Blue, GoSwitch and Compare the Market, which offer a range of comparison services.
If you have bundled services like gas and electricity with one provider you increase the chances of getting a discount - so ask (and be armed with competitor intel to assist your negotiations).
Be mindful of changing health funds as waiting periods generally apply, impacting services you might need immediately. For example, a 12-month waiting period for pregnancy services is generally more helpful to elephants than humans.
Save yourself first
The unpredictability of life’s journey can be smoothed by having access to cash reserves like savings, a mortgage, an offset account or a redraw facility.
Often called a rainy day fund, using reserves to fund unexpected costs from an offset usually costs less compared to using a credit card which has higher interest rates (both usually have annual fees).
Tip: If you are in debt, create a repayment plan using Otivo to see how you could be better off. While you’re there, use the comparison tool to see how other debt and savings products compare.
Who needs personal insurance?
You might. Remember what it’s for — protecting you and those depending on you financially, from unforeseen events like illness or disability. Once reduced or cancelled it’s hard to get back to the original amount you needed the cover for.
Your super fund usually offers life, income protection and disability cover, with premiums that are generally cheaper and paid for from your super account. This leaves your cash for other purposes like paying rent or a mortgage.
Log into your Otivo account, go to Insurance and see what cover your super fund offers, how much cover you need and what it’ll cost. Then you're informed to review any existing cover and make adjustments.
Ways to tackle your living costs
Sure, looking at your home and kids gives you a good idea of where your money’s going, but a Budget leaves no doubt. It also reveals the little things that add up like transport, daily barista coffee or takeaway food.
Given some choices are personal, we’ve provided a selection of ways you could manage your cost of living:
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Create and stick to a Budget |
Develop a detailed monthly budget that outlines income, expenses, and savings goals. Monitor spending and adjust the budget as needed to ensure that income covers essential expenses. What’s left should go towards mowing down a mortgage but we understand if used for pleasure instead. |
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Reduce unnecessary expenses |
Identify discretionary spending and consider cutting back on non-essential items and activities, such as dining out entertainment, or subscription services. |
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Debt consolidation |
Involves taking out a single loan or low rate credit card to pay off multiple debts. Benefits include a potentially lower interest rate, lower monthly payments and easier admin. You can consolidate your debts using a personal loan, mortgage or balance transfer credit card. Log into Otivo for help. |
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Shop smart |
Look for discounts, sales, and promotions when shopping for groceries, clothing, and other goods. Consider buying generic or store-brand products to save money. |
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Save on housing costs |
If feasible, consider downsizing to a smaller home or apartment with lower rent or mortgage payments. Explore shared housing arrangements or co-living options to reduce housing costs. Haggle or refinance a mortgage to take advantage of lower interest rates, if viable. |
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Transportation savings |
Consider using public transportation, carpooling, or ridesharing services to reduce fuel and maintenance costs. Evaluate whether it's feasible to use a bicycle or walk for short trips. |
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Seek opportunities for additional income |
Some ideas to get you thinking: Selling unwanted goods, part-time gigs like Uber driving or freelance consulting. Negotiate salary increases with current employers or explore higher-paying job opportunities. |
Remember that improving one's cost of living often requires a combination of strategies and may take time. It's essential to set realistic goals, track progress, and make adjustments as needed to achieve a more secure financial future.
Otivo can help you with that — and more. In fact, 34% of people reported being less worried about their finances after using Otivo.