Are high costs making it harder to manage your finances? If you're feeling the pinch, you're not alone. A report by Roy Morgan revealed that 1,659,000 mortgage holders, or 29.5%, were ‘At Risk’ of mortgage stress as of August 2024. Mortgage holders are considered 'At Risk' if their repayments exceed 30% of household income. Even though tax cuts have helped ease some financial pressure, this number remains significantly higher than two years ago. Since the Reserve Bank of Australia began raising interest rates in 2022, an additional 852,000 households have fallen into the ‘At Risk’ category.
Mortgage holders who are struggling to meet even interest-only payments now total 1,013,000—18.6%—and are considered ‘Extremely At Risk.’
Here are some practical strategies to help you reduce household spending and ease the financial strain.
Negotiate Better Deals on Utilities
How long has it been since you last spoke to your electricity supplier? How about your gas provider, internet provider or mobile phone company? You could be paying more than necessary. A quick comparison of electricity, gas, and internet providers could save you hundreds each year. Don’t wait—take action today and start trimming your household bills.
If you are at the end of your contract, jump online and shop around. Finding new deals with competing companies is a great way to reduce household spending over the long term. You could give your current supplier the opportunity to beat any quotes if you are really happy with their service.
Consider Refinancing Your Mortgage
The same method can be applied to your mortgage. Refinancing your loan can be a great way to secure a better interest rate and therefore reduce the minimum repayment and increase your cash flow. Some fees may apply to breaking your mortgage before the end of the term so look over your contracts carefully before you go ahead with refinancing.
Debt consolidation is another option. You may be able to roll high-interest debts (like credit cards) into your mortgage, simplifying your finances and lowering your overall monthly payments.
Tip: Talk to your lender about refinancing options and consider whether consolidating your debts into your mortgage could save you money.
Save on Transport Costs
A car is essential for most Australian families, but the costs associated with owning a car have been identified as one of the biggest expenses for the average Australian household. Luckily there are some simple things you can try to reduce these costs.
Keeping up with regular car maintenance helps ensure it runs efficiently, saving you on fuel in the long run. Make sure to have your car serviced regularly, keep your tyres inflated to the recommended pressure, and try using fresh air instead of the air conditioner when possible. These small changes can make a noticeable difference in fuel consumption.
Additionally, consider carpooling with neighbours or other parents who have kids in the same activities as yours. This not only saves money on fuel but can also help with time management. Whenever possible, try using public transport on weekends or for your commute to further cut down on transportation costs.
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Reduce Household Spending on Food
Cutting back on food expenses doesn’t mean buying less—it’s about making smarter choices. Eating out can quickly drain your food budget, so try to limit restaurant visits. If you do go out, look for restaurants that offer free kids' meals with a paying adult, and don’t hesitate to use discount vouchers from online deals, supermarket receipts, or local papers.
To save on groceries, plan your meals for the week and create a shopping list. By doing one big shop, you're less likely to buy unnecessary snacks or extras that inflate your bill. Another great tip is to cook in bulk so you can have leftovers for lunches, saving both time and money throughout the week.
Free Entertainment
Entertaining the family doesn’t have to be expensive if you know where to look. Your local library is a fantastic resource, offering access to free books, toys, games, and DVDs. They also host various activities, especially during school holidays, which are often free or low-cost.
You can also check with your local council or tourism board for free community events, family activities, or outdoor festivals happening throughout the year. These are great ways to keep the kids active and entertained without spending a fortune.
For more information on budgeting and how it can help get your finances back on track, check out our budgeting page.
