Saving money during a cost of living crisis

MS Plus acknowledges the traditional custodians of the land this podcast is recorded on, the Wurundjeri people of the Kulin Nation. We pay our respects to their Elders past, present and emerging.

Jess: We are hearing more and more often that there is a cost of living crisis in Australia, but what does this mean? Hi, my name is Jess and today we're talking finances and how you can save more money. The cost of living is the amount of money that it takes to afford the basics, so things like food, housing, healthcare, utilities, and taxes.

There are estimates that the current cost of living in Australia is roughly $4,400 per month for a single person, or $7,800 per month for a family of four, and this is just the cost for the bare essentials for a month.

This actually means that Australia is one of the most expensive countries to live, and it's currently ranked 9 out of 69 other countries.

So, with high cost of living, this means that many households are impacted, and their budgets are tightening, and it's often the low income earners who will feel the financial strain the most. So, in this podcast, we talk to our very own social work advisors, Catherine and Michael, about the cost of living crisis and how we can find some financial relief during these tough times. And these are tips that can be used by everyone, with no concession card required.

Jess: Catherine, otherwise known as Cat, has been a social worker for over 15 years and she's got a background in supporting people with neurological conditions and has a real passion for social justice. While Michael has over 30 years’ experience as a social worker with a background in disability, aging, homelessness and mental health in various roles.

So, Catherine and Michael, thank you both for speaking with me today. In your roles as social work advisors, I know that you often talk to people about their financial situations and the difficulties that might be associated with this. Has there been an increased demand for social work support with financial difficulties on the rise in recent times?

Michael: Yes, we have absolutely seen an increase, but we also see an increase is in other situations that are related to finances. So, family pressures, accommodation, mental health issues. When a family deals with an increase in costs, I guess all the other things also come up.

Cat: I’d like to point out to those we speak to that, you know, living with MS is more than just the presentation of physical symptoms. You know, your diagnosis comes with additional costs in managing your health and wellbeing. So, you might have out of pocket costs for tests, scans, medications. You have to pay extra petrol to go to your appointments, parking costs. So, if people with MS are already facing extra financial challenges, then the increased cost of livings are hitting hard, and adding a lot of stress to the people we speak with.

Jess: Absolutely. So, one thing I noticed when looking at financial advice that's aimed at people with chronic illness is the advice quickly points towards using a healthcare card to access discounts and other concessions with this almost automatic assumption that people with a chronic illness or MS have this available to them.

However, I know that many people we speak with and that you both speak with are not eligible. So, with that in mind. What financial tips or strategies could you suggest for those people who aren't eligible for a concession card?

Cat: Many people look to their health care card as their golden key to savings, but those who don't, who aren't eligible, feel like they're being left high and dry. But they can feel the financial pinch as well. So, I think Michael and I, yeah, would love to share some ideas about, some general day to day options that apply to sort of, everyone, regardless of whether you have a concession card or not.

I find that, there is a cost to saving money and that's a little bit of time, but the investment is worth it. And, you know, all the little savings that you might collect certainly add up. I think when you're living with MS, allocating mental energy to research and planning can feel like a task you just don't have the resources for, but it is, it is effective. So, yeah, Michael and I will share some, like, little tips. to make it a bit easier, and not sort of seem a bit overwhelming.

Michael: In fact, I'd like to say that all of us have patterns. The patterns that we do fall into are sometimes very useful and sometimes not so useful. With finances, there are lots of patterns that we don't even realise that we have been repeating and they're... not always great. Sometimes when the times are good, and you adopt a pattern that works for you, then when you have money, well that's okay, but if financial situation changes and your patterns not change, then you may be falling into a space you're not comfortable with, and that can easily change.

Jess: Great, so what are some ways that people can save money?

Michael: If you're looking at big ticket items like washing machine, stove, refrigerator; shopping around makes a huge difference. Sometimes hundreds of dollars for the same make and model.

You can also use the Good Shepherd, because they're able to sometimes compare prices from lots of places and find a deal that you would normally not be able to find yourself. But even when you're considering day to day shopping, there's a lot to say about how best to get the best out of that.

For instance, supermarkets would have half price deals every week. And if you look at it, each of the two big supermarkets would have kind of the same items, but not in the same week. So, between the two of them, there's a lot to compare and a lot to gain.

You can also have, the apps that come with them. So, Coles and Woolworths have apps, you can also have Scoopon, Groupon, eBay, and lots of many other apps so that you don't always have to go places and look at things. You can in the comfort of your own home, devote a bit of time, have a look at what you need and, yeah, go with that.

With the big supermarkets, you can also compare Aldi if you have that around the corner from you or, um, other places that may have better specialty items.

For instance, Chemist Warehouse, or Priceline may have items that are discounted for a cheaper price because they also look at Coles, looks at Woolworths but even if their price isn't always better, use price matching.

Price matching is where you go to a retailer that you know is involved in price matching, like Bunnings, Chemist Warehouse, Officeworks, and ask them to match a price that you've seen elsewhere. And most of the time, they won't only match your price, they will actually give you five or 10 percent better than the deal that you've seen elsewhere.

Cat: I'm a big convert to petrol apps. Before I need to fill up, I will take three minutes to open the petrol app and look at the different retailers and find the cheapest one close to me. It was something that I sort of didn't really believe in but when there's 40 cents a litre difference for a petrol station that might be an extra 500 metres down the road, that's an extra 20 in my pocket, at least, for very little effort and, you know, planning and putting a little bit of time into preparing really does make a difference to your wallet.

Michael: We all have patterns, like I said before, and, those patterns can be buying coffee every day, sometimes two or three times a day, buying lunch as opposed to bringing it with you to wherever you are. Sometimes the difference looks small, but when you add it up over the year, it can be literally hundreds to thousands of dollars. So, plugging holes in spending.

Cat: And I think, you touch on a good point, Michael, because we are so time poor these days and we are looking for convenience that, you know, we tap our card when we pay for things and we're not really being mindful with what we're spending.

We sort of grab our item, tap, and then off we go. And you know, unless we're sort of reviewing our statements, the expenses are adding up and there are ways which we could easily cut back if we put a bit more attention into, where the money's going. As you said, plugging the holes.

Jess: Great, what are some ways that people can save on these basic and essential services that can't be trimmed away? So things like our insurances, utilities, you know, phone plans, things that we all need to have.

Cat: I think the biggest key is to change any assumption that you'll be rewarded for brand loyalty. So, companies are relying on customers being too busy to shop around. So once they have your business, and in many cases, they don't need to try as hard. They're putting their energy into enticing new business. So I'm going to always, you know, do a shout out for reviewing your contracts, whether it be for utilities or insurances, to make sure that you really are on the best plan.

And again, I'll use a personal example, it's that when I was doing it myself recently, I was able to switch to a cheaper plan, but with the same company. So I didn't have to go through lots of admin, it was done sort of within five minutes and I got a cheaper rate.

Michael: Cat's absolutely right. Businesses rely on patterns that they've set with you sometimes months, sometimes years ago. They quite often offer a better deal, but they're very unlikely to call you themselves and offer it to you. If you look around and you find a better deal, calling your service providers, your internet provider, your phone company might allow you to negotiate a new deal with them with this other deal that you found in mind.

They may not be able to match it, but they will always want your business and they will do their absolute best. So, do your homework, look for something else that fits your needs. Offer that deal to your current provider. If they can't match it, but they can do something that's good enough for you, obviously, stick around with them. But if the new deal is what you're after, then yeah pick that one up.

Jess: Mm-hmm.

Cat: Something that Michael and I speak about a lot as well is that, a lot of people are customers of the big name companies because they are, what's known to them, they're familiar, they have a reputation for being trustworthy. You are paying a price for the brand.

So, there are a number of smaller players who are also providing good services and having to work harder for the customer base, and that's where you're going to find the savings. Michael and I are always looking to cut costs ourselves, and one of the changes I've done is I've gone from sort of one of the big, phone companies for my mobile plans and I've gone to Aldi Mobile. It still uses a Telstra network, so I know that I've got great coverage, but the prices are very different. Everything can be done online, I don't need to visit a store and it's been a real game changer for me. So I'm not plugging one particular company over another, but just to point out that, if we do delve under the surface a little bit, there are some great savings to be found.

Michael: One of my common examples is car insurance. Car insurance will go up every year. Now, sometimes the premium is reasonable, and sometimes it's much higher than what you'd expect. At that time, I would advise you to give your company a call and have a conversation with them. Quite often, they will reduce the price to somewhere in the middle between your original price and what they are wanting to charge you next.

The good thing about that is that next year's price hike will be from that price and not from the newer higher price that they would have charged you otherwise. And you will gain money in perpetuity, which is always worthwhile.

Cat: I think another important point to mention is that there are a lot of comparison sites out there, if you were to sort of search online, some of them are private companies that, you know, their customers, their providers that, you know, pay a commission, to appear on these websites, but the government also runs their own.

Okay, so it might not be the top of your search engine, because they're not sort of paying premium to be found, but for example, the Australian government runs the Energy Made Easy site for people living in New South Wales, TAS and ACT, and the VIC Energy Compare in Victoria. And that is a more independent way of comparing sort of plants. And the same goes for private health insurance, life insurance.

So even when you're going on the comparison sites, just be a little bit mindful about which ones are independent and which ones are sort of operating for profit.

Jess: Yeah, that's a, that's a really good point. Now, the lure of buying items brand new can be really strong, and there is such a thrill with getting something perfect and new. However, are there ways that we can still get the item that we want, maybe without paying the new item price tag?

Cat: Michael, this is our question, hey? We are big fans of the pre-loved items.

Michael: In the olden days, I think there was a stigma about having something that was used, these days there are so many options. It's not just the op shops, it, can be Facebook marketplace or eBay or Gumtree, there are so many choices where you can find either a new item that are no longer needed by someone or extremely good quality items, from very good brands that are offered for a fraction of the cost.

I think, again, a little bit of homework, can really pay hundreds and hundreds of dollars. Because for us, there are two ways of having money. I mean, one is to make it, but the other one is to keep as much of it as you can, while still having an excellent life.

Cat: We talk about sort of, you know, buying pre-loved, but there's actually a real market out there for, if you want to sell something that even if you think, you know, really, is getting a bit old or it's an unwanted item, but if you try and sell it, you'll be surprised that there's usually a buyer.

And again, all the little bits of money that you might make, you know, certainly add up. I had to change some curtains. I was able to find a buyer for my old blinds. You know, I would have thought that was something that had to go straight into the rubbish bin, you know, surprise, surprise, you can make a little bit of extra money. So, don't forget to look around, what you have already, and maybe you might be able to declutter, and also make a few extra dollars from it as well.

Jess: Mm-hmm.

Cat: I'm going to give another example that, I'm trying to save money in my family and so we're looking at doing a bit more camping. And Michael, you were scouring an Op Shop just last week and you found me an amazing quality inflatable camping mattress for $4 that, you know, would retail for close to $100. So there's a bit of a thrill in the find, but, you know, aside from that, you have just saved me a lot of money and the quality of the mattress is as new.

Michael: The other thing that we find is that people forget about their families or friends. Some have excellent skills and can do things for you that, you would have to pay professional to do instead. Sometimes it's also about thinking of who can do what and how can each of us help each other.

It's always important to look at our community, look at our family, and think, well, how can we save there?

Cat: You know, you might feel very overwhelmed with having to do research and look at different providers, exactly ask your family and friends and work colleagues about who they're using. They've done the research, they will have some really great tips around the best providers and the cheapest providers that they're using.

Jess: Another thing I'm actually hearing more about are these Facebook Marketplace groups that are dedicated to certain brands. So selling the same high quality brand, but maybe at a discounted price. Is this another good avenue for savings? You know, especially if you've got your heart set on a certain brand or a label that you prefer.

Cat: I feel like you're speaking to me directly because I can't tell you the last time I've been into a physical shop. I do my shopping sort of through those groups. I have particular brands that I like, usually it's clothing that has pockets, and so I know that if I go to certain groups, I can get something for half the price, but still amazing quality items.

The only thing I just want to point out is that as long as, you know, if we are doing those sort of pre-loved, sort of community marketplace, is just to keep safe.

And there's some little tips that you can do. Make sure that you're using PayPal for sort of online transactions for protection because they will refund you if anything does go dodgy. And just make sure that you're keeping your head clear for sort of people that might be like scammers out there.

So if someone's trying to rush you, someone's trying to put pressure on you, a deal seems too good to be true, I'd be making sure that your alarm bells are ringing and stopping and reconsidering whether this is where you want to go.

I do want to also put one more point out there, and it's something that I absolutely love, and it's a movement called the Buy Nothing Movement.

It is a bunch of people that are trying to save buying things just for the sake of it. So, if I'm looking to declutter, I put my items on a buy nothing group, someone who's interested can come and pick it up from my doorstep. No money is exchanged, and we're saving landfill and we're saving having to go purchase things new. And it's a lot of fun, you get to actually know people in your local suburbs, and it's nice and easy. So if you haven't heard of it, do look into whether there is a Buy Nothing group, on Facebook in your local area. It's been a lot of fun for me.

Michael: With the Buy Nothing, also have a look at Facebook marketplace. Quite often if let's say you are a wood burning kind of person in winter, you will find a lot of people have chopped the tree and would love you to pick it up free of charge. You can just pick it up from someone's lawn and you're doing them a favour.

Cat: A lot of things can't be accepted by Op Shops anymore. So, these kind of items on Buy Nothing or just, you know, for free on Facebook Marketplace, is sort of a win-win, people can offload items, and then, but you can also find what you need as well.

Jess: Just going back to talking about emotions when you're spending money, for some people, the thrill of buying something, you know, new things can really contribute to excessive or impulsive spending. How can people that struggle with emotional spending get on top of this?

Cat: I think sort of having an awareness of it is a really good start, having the insight to know that, you know, just like when you're really tired, you might make poorer choices with eating, when you're really tired or frustrated or stressed, and because of the ease of maybe online shopping, so sort of building on from what we just spoke about, you know, that's when you might sort of make choices that… I've just bought my fifth dress this week and I really, you know, might not need it and that money could be better put towards my next car service. So, I think spending like all vices, needs to be monitored.

Michael: I would say that all buying, all spending is emotional. There's always an emotion attached. The ability to go and get something that you need is a reward in itself, but if that reward takes over the actual item and spends you the money that you don't have, or your family does not have, then it usually comes with regret soon after.

I mean, yes, you have that thrill of the find, the chase, the purchase, and now what? Do you actually need it? So working out a budget, working out a top budget for the item, looking for where you can have it, looking for its needs and then absolutely go ahead. But if it fails your test of being needed and used at the end, is it worth the buyer's remorse?

Cat: I think Michael raises a fantastic point there, and I sort of want to build on that and just saying, you know, even if you're on a budget, it doesn't mean that it has to be all doom and gloom. Make sure that your budget includes some sort of saving for a goal that brings you joy. Okay, whether it be a short term goal, a medium term goal, you know, something a bit more longer term, but make sure that you're putting a little something away towards that goal and, so on top of all that sort of budgeting and all the serious stuff, there is a little bit of savings that's bringing you joy.

You know, saving doesn't have to be boring. There are lots of fun ways that you can do it. You know, every time you get a coin, put it into a jar and watch how quickly it fills up or, there, there are lots of cool things out there to make budgeting or saving, you know, not so dry and boring and dull. And when you are more motivated, you're going to be more successful.

Jess: Absolutely. And I think that when we talk about money and debt, there's a lot of shame associated with that when in reality, there is probably not a single person except maybe, you know, the top 1% percent who are living completely debt free. So, we all, to some extent, are living with debt. But for those people that are really struggling to maybe manage their finances or just putting off looking at their financial situation, where can people go to get help in sorting it out without fear of judgment or without fear of being shamed about their financial situation?

Cat: You know, if you have a new symptom, you're going to go to your GP and you're going to go get checked out, right? You're going to do a health check and you're going to do it regularly. And that same advice needs to be top of mind when it comes to finances. So, what we don't want is for when times get tough is for you to procrastinate on getting help because prevention is better than cure.

So getting on to support early is the key. If things are travelling along okay, a financial advisor can be someone who just has a review of your finances and can help you with that advice for planning for sort of short, medium and long term goals.

But if you're finding that times are a bit tough, the debt is getting a little bit on top of you and it's causing you some stress and anxiety, then there are financial counsellors who are there to, you know, work with you on budgeting, help you with debt management, they can advocate for you with providers, you know, where needed, and really provide that support.

There really isn't a stigma about it. You don't need to have a health care card or sort of, you know, there are plenty of people that are asking for help who have mortgages, who are employed, but are really finding these times very challenging.

Michael: I would say several things. I mean, one is if your family is in debt, but you're the one who's holding the budget and you're the one who is, responsible for everything or feels responsible. One of the first things that I would advise is talk to the rest of your family. Make sure that the decisions that you make, going forward are all of you and not just you the one who's putting on the stress on themselves.

I would also say that there are resources available like there are apps that help with budgeting. There's obviously DebtLine, which is 1800 007 007 and even if you don't want to talk to somebody there, you might be able to look through the website and see a lot of hints about how to manage debt.

Bargain with the people you are indebted to and maybe put in a payment plan that will help out a lot, or if you do want to, you can talk to somebody and that somebody can not only run you through what's possible, but they may even advocate on your behalf to a company or a person to be able to start that negotiation going.

Cat: Uh, Michael, I think it's amazing that you touched on the, the, 1 800 DebtLine because, I think it's an unfortunate named service. It is free for anyone and you don't have to be in debt to use their services and call and get some advice or be linked in. And I think there is a stigma that, you know, things have to be very dire before you go and call a service called DebtLine.

I would encourage people that, you know, if you are just looking for some tips and advice to call them up and, you know, again, that preventative measure, you know, if it can stop you from getting into debt, then that's a phone call well made.

Jess: As Social Work Advisers, what sort of assistance and support could you provide someone who is facing these types of financial difficulties?

Cat: Michael and I can do some general advice, so we're not financial advisors and we would never, you know, give you specific advice. But if you're looking for general advice around, well, maybe I do need to have a look at whether there's something that Centrelink might be able to provide, or I'm looking at cutting back work, or, there's been a big change in finances, we can provide some general information about what's available.

Maybe it's around to superannuation insurances. That's sort of been, you know, forgotten about. And then, you know, with that, depending on your circumstances, we then link you in with the more specific places to go for follow up. So don't forget that we're here as a Social Work Advisor Service with MS

Michael: Cat, you're absolutely right. Some of the things that we can talk to people about are the No Interest Loans that are available for people on low incomes. And those could be really useful to purchase that washing machine or a refrigerator that you absolutely need, but would otherwise struggle to purchase.

Also, there's the Pro Bono Financial Advice Network that can also assist, and they can provide one or two sessions of free financial advice to people who are not sure where to go to, but need something more specialized than what we can provide. It's always, it's possible to have those doors open, but because they don't advertise very much it's difficult to find them unless you talk to somebody who knows where they are. So, yes, give us a call.

Jess: Great, those are really helpful tips, and you know, that could be a really great start for someone who maybe has buried their head in the sand about how to take those first steps in managing their financial situation. So, in summary, if you each had one top tip to help manage the current cost of living pressures or even just navigating your finances, what would that be?

Cat: I think, building on from that last point is trying to avoid debt where possible because it's a lot harder to then sort of get on top of things. So, you know, sometimes we are busy, we are tired when you're trying to just, you know, keep your head above water with symptoms and family and life and work, we might procrastinate.

You know, actually being proactive, with making changes to our finances, but it's worth the time and it's worth the investment. Do it in small chunks, right, so it's manageable, but it will, make such a big difference to your finances, sort of, in the short, medium and then long term.

Michael: And for me, I would say talk to the people around you. It's not just you. More brains, more talk will get you to plan better because as Cat said, planning is the key.

We do things because we do things because we did them yesterday, but... if you want change and you want more money in your life, then unless you can earn it or you're lucky enough to win Lotto, keeping it is the best way of having it.

Jess: Absolutely. Thank you both so much for speaking with me today and it's great to know that social work advisors are another valuable tool for people to access, you know, when they might be having financial difficulties or even just not knowing the first steps in getting on top of their debt. So, thank you both so much Cat and Michael.

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