Let's reduce the cost of living

I've never seen financial conditions like those we have now. The cost of living is increasing in Australia, I'm affected by it and I'm guessing you are too. I'm in the good position of being debt-free, we paid our home off many years ago but I still have to watch every penny.

Make your own laundry liquid and cleaners - it will will save you an extraordinary amount of money.

Hanno and I have lived on a pension for some years and we built a nest egg that provided a feeling of security but when he died, that changed. I went from a couples pension to a single pension which is more money but when you calculate all the goods and services over the course of a year, the single pension doesn't look so good.  I've spent the past six months learning what needs to be paid and when, and I'm also paying small amounts frequently on the large bills like rates and car registration, instead of being hit with a big bill every six months.

Hanno always organised our finances and he was very good at it. So, I turned my back on all of it and lived in that oblivious state for over 40 years. When he got sick, the last bills he paid were in November and I didn't even think about paying bills until four months later, when they were overdue! When I looked in his email account, there they all were, waiting for me like a ton of bricks.  I should have know exactly what he was doing, I should have shared that role with him and had I done that I might be in a better financial state than I am right now.

When Hanno was in hospital, there were no expenses - everything was covered and we had private health insurance for the extras. But before he went to hospital, when I was looking after him at home, I bought a number of high priced items - wheelchair, walker, bed rails and incontinence items. He also had speech therapy for swallowing and physiotherapy for walking. We paid for all of that while he was at home even though we had a level 4 home care plan.  That plan looked good when he got it but the funds dribbled in and it was eaten up with services - people coming to help shower him etc., and there was never enough money to buy the equipment he needed.

Cook no-meat meals.

To make a long story short, now that I look back on the past six months, I realise I should have been aware of my financial position much sooner. Had I been sharing that work, I would have been. However, now the nest egg has decreased a lot and with the cost of living higher than ever before, I'm trying to stretch dollars.  As you know, we got our finances in shape by stockpiling groceries, cooking from scratch, growing food in the backyard, monitoring our electricity and water. We stopped TV we had to pay for and buying magazines, drinks and lunches when we went out. I've already done all the big changes, now it's down to the list below. The steps are small but they're all worth doing and like buying a cup of coffee every time you go out and realising that cost adds up to hundred of dollars a year. Stopping those small things to save money takes time too but it's really worth it.

Mend and make do.

I'm lucky, I don't have to pay rent or a mortgage, we paid that off, in eight years, a long time ago. But interest rates are rising now after being low for many years and that is hurting a lot of people and for some, it's not sustainable. If you're in that situation, I urge you to hold on and start working on these lists below. Times will be tough for you, you'll have to stop buying your favourite things, stop holidays and stop shopping without your budget in mind. You will have to sacrifice to survive.

If you don't have a budget, go to https://moneysmart.gov.au/budgeting/budget-planner now. It’s the Australia government's site which holds a lot of useful information about debt, mortgage repayments and budgets.  Forget the freedom of spending in the past, think of the future and how you can save your home. It will be hard but most of you will be able to do it.  And don't forget to talk to your bank to find out how you might be able to reduce your payments for the time being. You'll have to make up for it later when things return to normal - and they will - but that one thing may help you keep your home.

CONSERVING YOUR RESOURCES

In times like these you should be mindful of everything you do that will save money. Try to cut back on the amount you will have to pay in utility bills and for transport. That money is much better in your pocket than profits for Energex, Telstra or Shell. So let’s go through a few things you can do to keep money in your pocket.

ELECTRICITY

• Use your electrical appliances like washing machines, vacuum cleaners, dishwashers in off-peak times. Phone your electricity provider and ask if you have peak times and when they are.
• If you have solar panels, use your appliances as soon as the sun hits the roof - that way you'll use the solar power you generate instead of buying from the grid.
• Wash your clothes in cold water and dry them outside in the sun. I always wash in cold water using homemade laundry liquid and our clothes look fine. Over the years, this has saved us hundreds of dollars.
• Use compact fluorescent light bulbs. Fluorescent bulbs are more efficient than traditional bulbs. A 60-watt fluorescent bulb has the same lighting capability as a standard 75-watt bulb and it will last for years. Light bulb buyers guide.
• Turn off the lights when you leave a room.
• Turn off the TV when no one is watching it.
• Turn off appliances at the power point, not just at the appliance on/off button.
• Fill the kettle with just enough water for your tea or coffee. Boiling water you won’t use, is an expensive waste. If there is hot water left over, pour it into a thermos flask and use that for your tea or coffee during the day.
• Buy a power board and plug in all the appliances you have close together into that one power board. When they aren’t being used, and especially at night, turn off the power board. That will stop all those appliances using stand-by power. It is estimated that 10 percent of the power used in Australia is for appliances on stand-by.
• When you boil food, either on a gas or electric cooktop, put the lid on your saucepans because it retains heat. Your food will come to the boil faster, and then you can turn the power down to cook on a simmer.

If you can, grow food in the backyard - or in containers.

WATER

• Fill a bowl with water to wash vegetables. Letting the tap run while you wash wastes litres of water.
• While you’re waiting for the shower water to warm up, fill a bucket with the cold water and use it on your garden or in the washing machine (top loader only).
• Have shorter showers.
• Turn the tap off when brushing teeth.
• Flush the toilet only when necessary.
• When washing your hands, wet your hands, turn the tap off, apply soap and lather, turn the tap on again to rinse.
• Install water tanks if you have a vegetable garden, or at least set up some water barrels at the down pipes to catch what rainwater you can.

COOKING

• Cook larger portions of food and freeze the leftovers for use on other days. This will enable you to cook meals for more than one day and use only the electricity to warm the food again.
• When you boil something on the stove, bring it up to the boil, then turn it down to a fast simmer.
• When boiling on the stove, always keep the lid on the saucepan. This reduces the time it takes to come to the boil.
• If you’re using your oven, cook more than one thing.
• If you’re baking bread, do more than one loaf and freeze a couple of loaves for later.
• If you have a small convection oven, use that instead of your large oven.

If you have a small convection oven, use that instead of your larger oven.

Cook from scratch.

Preserve your excess.

Bake bread, cakes and biscuits from scratch.

PHONE

• If you're not on the cheapest plan right now, do some research to find out what you can do to reduce your phone costs.
• If you're on a contract, never let your contract go from one year to the next without negotiating a better deal with your phone company.
• While you’re saving, use the phone only when absolutely necessary. Stay in touch with your friends online instead.
• Use Skype or Zoom for your long distance calls. Make sure you download the right version for your equipment - there are versions for Apple phones, ipads and computers as well as for Android smartphones and computers.

TRANSPORT

• Plan your trips so you're not using the car to go to one place. Work out what you have to do and plan your trip going to multiple places to use the least amount of petrol.
• If you have to take the children to school – share that with other parents in your neighbourhood. Even if you share with your next door neighbour so that you take them and she/he picks them up, it will halve your school trips.
• Start a walking bus. Parents take it in turns to take a group of children to school by walking with them.
• Download the motormouth app to find the cheapest petrol in your area.
• If you run a business, make sure you keep a diary of your business and private car expenses so you can claim what you're entitled to at tax time. 

REGULAR BILLS

• At least once a year, look at the details of all your regular bills. Bills such as phone, internet, electricity, phone and insurance should all be checked. Ring up the opposition and ask what they would charge you for the same service. When you have a good idea, phone the company you deal with and tell them you could get a better deal with a rival – and tell them the company name. Say you’re ringing to ask if they can equal or better that because you’d rather stay, but as you’re on a tight budget you must go with the best deal. Often this pays off and it should become part of your financial practice each year to test these boundaries. 

This is one of our old gardens. We were vegetarians then and we grew most of the food we ate. 

GENERALLY THERE ARE A FEW WAYS TO CUT BACK.

• Separate your wants from your needs and be firm with this.
• Ask yourself if you really need it.
• If you do need it, can you barter something for it instead of spending money? Bartering used to be quite a common way of obtaining goods in small communities. Ask around, you’ll probably find people who are keen to barter. See if your neighbours or work colleagues are interested in bartering.
• If you can’t do without it and can’t barter for it, can you make it yourself? One of the skills you’ll develop in your simple life will be to hand-make many things from food to clothes. Maybe you could learn to make what you want.

Try to live on less than you earn.  If you can't do that, you'll be paying off debt all your life.  But now in these current difficult times, with high interest rates, unemployment, increasing food and fuel prices, there ARE things you can do to reduce your expenses. This won't last forever but it will last a few years. So if you start helping yourself, following a budget and reducing costs, you'll come out of it in reasonable shape, and hopefully still living in your own home.  How are you tackling this problem, please share what you're doing and we might all learn something.  I wish you all the best of luck,  Now, let's get to work and start reducing our expenses.