How The Rising Cost Of Living Impacts Australian Households 

The cost of living is rising across the globe, but that’s cold comfort for Australians who are working tirelessly to pay the bills and balance the budget. 

While the cost of rent has risen, the shift in cash rates has made mortgage repayments a challenge. So, whether you’re a homeowner or a renter, you might have financial concerns about housing. According to statistics, Australia is one of the top 10 most expensive countries to live in. 

Whether it’s high grocery prices or housing costs, you can’t make money appear out of thin air. With stagnant wages and rising expenses, it’s never been tougher to break even. It’s taking a toll on Australian health with many people struggling to make ends meet and afford basic essentials. 

What’s contributing to rising costs 

One of the biggest contributing factors to the rising cost of living is increasing interest rates driving up the costs of payments and interest charges. Inflation is a global factor and it is putting heavy economic pressure on everyone. That has led to a surge in housing and rental costs, and when you factor in rising energy and utility costs on top of that, it’s easy to see why so many Australians are falling short financially. 

Food prices are spiralling, fuel prices are climbing and with rising expenses and stagnant wages, something has to break. Unfortunately, it’s Australians who are breaking down because it’s hard to see the light at the end of the tunnel. 

The impact of steadily rising costs 

With higher debt levels and reduced savings, many Australians are in financial stress. As a result, they’re cutting back on non-essential spending as much as possible. However, that doesn’t eradicate the problem. 

Homeowners struggling with mortgage payments could face losing their homes, and with low vacancy rates and spiraling rent, the complexity of the situation cannot be understated. Unfortunately, it will result in many Australians sleeping rough. 

For Australians with children, there’s an added layer of financial stress. The cost of childcare and healthcare is another cost to factor into an already tight budget, and you can’t scrimp and save on these things because parents have to work to keep a roof over the family’s heads. 

Australians are struggling with their mental health. Not only can chronic stress due to financial pressure contribute to poor mental health, but poor mental health can make financial management even more difficult. 

Tips to cope 

If you’re struggling financially or you want to get ahead of the struggles by planning, there are many ways Australians are coping right now. 

One of the first steps to managing your finances more efficiently is budgeting and cost-cutting. Sit down and make a list of your incoming and your must-outgoings, including your housing costs, utility bills, credit repayments, etc. Add a third column that details all your additional spending, including coffee, eating out, splurge spending, and anything else you spend your money on. This is where you should include streaming services and subscriptions. 

What can you cut? Be as ruthless as you need to be to make room for savings and some breathing room. 

You may be eligible for government support or financial assistance, so consider your situation and look at the relevant websites to see what you can apply for. There is also an increase in services like Buy Now, Pay Later (BNPL), and no credit check loans can help you consolidate debt, pay for medical care, cover car repair costs, or refinance your home. These services can help you navigate challenging financial periods and give you a bit of daylight. No credit check loans can help you consolidate debt, pay for medical care, cover car repair costs, or refinance your home. 

There’s also a shift in consumer trends. Reaching for the store brand is a good place to start, and those pennies add up; you can also start shopping for clothes and other necessities in your local op shop. 

Summing up

The impact isn’t just on everyday Australians; it’s impacting every aspect of the economy. With reduced consumer spending, small businesses are struggling to make it through, leading to extreme cost-cutting measures impacting the job market. As a result, many people are reassessing their retirement plans and struggling to secure long-term financial security. 

Times are tough, and with rising costs on every front, it’s difficult to know how best to fight back. While the government has a role in creating sustainable economic solutions and supporting everyday Australians, you must seek individual solutions to get by in the meantime. With the right balance of your budget, you should be able to cover the essentials.