December 21, 2022 • 29 mins
With inflation tipped to get worse before it gets better, what can you do to protect your household budget from rising costs?
In this week’s episode of the It All Adds Up podcast, money editor Dominic Powell and senior economics writer Jessica Irvine share some of their top strategies for beating the rising cost of living.
It All Adds Up is the podcast where we make money easy to understand so that listeners can begin building their financial wealth. You can submit questions via email or voice memo to italladdsup@nine.com.au for Jess and Dom to answer each week.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:00):
Hello and welcome to It All Adds Up the podcast
where we chat about money, how to get it, how
to spend it, and how to invest it. I'm senior
economics writer Jess Irvine, and you're listening to our summer series,
where we're replaying some of our hottest hits to help
you get in shipshape financial form for 2023. It all
adds Up will resume normal programming in February with a
(00:21):
brand new season full of money saving tips and insights.
So until then, sit back, relax and enjoy. Hello and
welcome to It All Adds Up the podcast where we
chat about money, how to get it, how to spend
(00:42):
it and how to invest it. I'm senior economics writer
Jess Irvine.
S2 (00:46):
And I'm money editor, Dumb Pal. And this week we've
got some tips to try and help you beat the
cost of Living Crunch.
S1 (00:51):
Yeah, everyone is feeling the pinch right now. We know,
of course, that interest rates have risen at their fastest
pace since the 1990s, which increases the pressure on home owners.
But the rental market dollar is little better, with double
digit rises in rents in both Sydney and Melbourne over
the past year. And of course we know at the
same time general inflation is just rampant and expected to
(01:13):
get worse before it gets better.
S2 (01:15):
Yeah, it's a really peachy sort of outlook we're painting here,
but we're not battling at least with a $12 lettuce any. Those,
those days are over, but the cost of your weekly
shop is still rising because the cost of everything is
is rising. And every other expense, it seems, is also
going up. You've got petrol, energy bills, insurance. They're all rising.
So I guess the question is what can we do
(01:37):
about it, really?
S1 (01:38):
I came up with an innovative solution, which is you
could migrate to China because we had all our foreign
correspondents report back on inflation from across the world, and
China is keeping its inflation under control. But they are
still living under lockdown and the economy is not doing
very well. Yeah, And also, like, you know, part of
the reason why inflation is so high is because the
jobless rate is low. And, you know, we've we've got
a fairly strong resurgent economy. So it's like, do you
(02:01):
want your good news or bad news? The bad news, however,
is that it's just getting super expensive to live, isn't it?
S2 (02:08):
It is.
S1 (02:08):
So dumb. Let's help people. I think this is good.
We're just going to do like a snazzy, quick six
tips that you can sort of apply today and, you know,
maybe give you some of that relief that that you're
looking for because it can all seem a little bit overwhelming. So, Dom,
you're going to kick us off. What's what's your best
tip or your first tip, anyway, for dealing with the
rising cost of living?
S2 (02:29):
My first tip is if you're struggling with the cost
of living, the best way to not struggle with the
cost of living is to increase the amount of income
you have. So you should, if you have a job,
go and ask your boss for a pay rise. We
talked about this in our second episode, I believe. So
if you want sort of sort of really in-depth tips
on how to do that, go back and listen to that,
that episode. But it is the number one way to
(02:51):
sort of increase your income is to to ask for
a pay rise. You know, obviously, this isn't applicable to
everyone if you're on sort of jobseeker or a pension
or something like that, you obviously can't ask for for
a pay rise. But with the cost of living, you know,
it is you're perfectly within your rights to go and
go and say, hi, I'm struggling with this or, you know, my,
my productions increased or I'm gone. Additional responsibilities. I'd like
(03:14):
to be paid more. And it is you know, the
least you can do is ask. And if it works,
it works. If it doesn't, it doesn't.
S1 (03:20):
Yeah. Thank you for having this is the first tip
because we spend so much time, like how can we
trim our expenses and save on takeaway coffee? But if
you can go get your pay yourself a pay rise
that's worth a couple of thousand dollars a year, that's
really good. And just go in armed knowing that unemployment
is still at its lowest in about half a century.
Like that is what's creating the pressure in part is that,
(03:40):
you know, if you if your current boss can't stump
up the cash, it's never been easier for 50 years
or so to go and get another job. So it
doesn't work for everyone. And you've got to make sure
it's the stars are aligned and you don't just walk
into the office one day and say, I'm done without
a job to go to. But it's definitely a time
to be testing the waters and looking around.
S2 (04:01):
Yeah, absolutely. And especially if you're in one of those
in-demand jobs, like, you know, one of my mates is
a Kota, and he recently looked for a job and
he got about four job offers. So, you know, it's
it's one of those things that if you're in the
in the right field, you really have a lot of
bargaining power and you should be swinging that weight around
as much as you can.
S1 (04:18):
Yeah. And even at that lower end, like sort of
more the retail, hospitality, food services, there's still real staff
shortages there because migrations for students are not quite back
where they were. So across the spectrum, it's a good
time to throw your weight around a little bit.
S2 (04:32):
Absolutely. But if you can't get yourself a pay rise,
just what should you try instead? What's your tip?
S1 (04:37):
Yeah, well, moving on, I guess, to the expenses side
of thing. And here's my tip. The biggest thing, I
think most people could just go and have a little
look at their figures today will be to have a
look at the cost of private health insurance. So we
know it's just gone up massively. You know, even before
the cost of living crisis, we were feeling the pinch
on those premiums. And I share all my figures on Instagram.
(04:58):
The money was Jessica and I always putting there my
monthly health insurance. I pay a premium of 80.49 per
month and people are always like, How do you get
it that cheap? That seems pretty low and it is
just for one individual. But how much do you pay
in premiums still?
S2 (05:13):
Well, I don't have private health insurer.
S1 (05:15):
Well, that's one way to say, oh, no. Yeah, well,
tell me, because, you know, the major question for people
is how much they earn. Because if you earn over
certain amounts, it's $90,000 for singles, $180,000 for couples. If
you don't have private health insurance, you're going to get
slugged with a medicare levy. So. Charge, which starts at 1%
of your income, goes up to 1.5. So are you
(05:36):
over that 90,000?
S2 (05:38):
Look, I am over the 90,000 barrier, but like I,
I don't know. It's for me, this one of these
sort of things where it's like the it's either this 1%
that sort of comes out of my tax. Right. The
sort of thing that I don't really notice that much
or it's like a straight. $90 every month that comes
out of my account. So I was like, it's sort
of like a mental thing for me, I guess. So
that makes sense.
S1 (05:58):
Oh yeah. But we'll do the numbers after this will
take you aside because you can get like an annual
basic level private health insurance policy, just basic level hospital.
And all you need is hospital. People think, oh, to
avoid the surcharge, I need extras as well. You don't.
You just need that basic hospital. And so I'm paying
like less than $1,000 a year for my premiums. Whereas
(06:21):
you will find, depending on your income, you'll be charged
even more than that in tax. So you might about
feel like it's painful being debited from your account, but
it's going to hit you at tax time. John. I'm
all right. So, I mean, just for everyone to to
check where you're at with your income, do you have
a policy? I literally just ring up insurers and say, hey, dude,
this is a tax dodge for me. I'm trying to
(06:42):
avoid paying the Medicare levy surcharge. I don't want your
bells and whistles. What is the cheapest policy you can
give me? Which means I will avoid the surcharge. And
then another thing I do to make it cheaper, you know,
I'm on the basic level, the silver and gold, but,
you know, I'm a healthy, relatively healthy young person. And
for me, I'm willing to take the risk that I
might incur some out of pocket costs or, you know,
(07:02):
I will fall back on the public system if I
if I don't have that maximum level of cover for
some things. And the other thing is I pay the
maximum excess. So you check what your excess is set at.
It increased recently that use for singles, it can be
set to $750 and that's how much you agree to
pay out of pocket in the event that you do
need to make a claim. So you know it's going
(07:23):
to hit you, but it makes the premiums much cheaper.
And they those excesses went up. The government mandates what
they must be. They went up a few years ago.
So if you haven't reviewed it for a couple of
years to check where your excess is at, check that
you're not being covered for, you know, pregnancy or something
that you don't need anymore. And really, I think people
spend thousands of dollars per year private health insurance. It's
(07:43):
worth having a look at your policy, bringing around just
checking that you're not sort of paying for something that
you don't get value from.
S2 (07:49):
But I'll go and I'll go and tally the numbers
and see if it's something that that's worth.
S1 (07:53):
Yeah, I'll help you will report, will report back. So, Don,
what's your next tip for Cost of living Relief?
S2 (08:00):
My next tip is looking at all the concessions and
rebates that you may be eligible for from either the
federal or state government. And I think the easiest way
to do this is going on to good old fashioned
Google and just typing in eligible concessions Victoria, New South Wales, Queensland,
whatever state you live in. And as far as I
(08:21):
can tell, I think all or at least most of
the state and territory governments have a website where you
can go on and they've just got the full list
of all the concessions and rebates that you could possibly
be eligible for. New South Wales either has a little
calculator you can do where you can type in all
your details. I mean it will literally just give you
a list of everything that you may be able to claim. Obviously,
(08:42):
like there's some big major ones which if you haven't
claimed yet, you should absolutely get on to like the
$250 energy rebate for Victorians. I would assume or hope
by now that most of our listeners have, if you're Victorian,
have claimed that $250 because it is just $200 in
your bank account, all you have to do is go
and compare your energy providers. It's so easy. So that's
(09:03):
definitely something you should do. But there's all these other
things you can get, like can get energy and gas rebates,
you can get public transport concessions, you can get relief
for toll roads like the payments you make on toll roads.
If you use a certain you know, if your toll
bill goes over a certain amount each week, like there's
a lot of things out there that I think people
don't realise that they could be saving money on from
the government, you know, and pretty low effort, pretty easy
(09:25):
to do. You just have to be eligible and apply
and you can get quite significant savings. So I think
that's a really good thing for people to look at,
especially if you're sort of really doing it tough. There
are a lot of things that the government will help
you out with in that sort of sphere.
S1 (09:38):
Yeah, the New South Wales Government has sort of gone
nuts on that. You know, you go to the website
is sort of up to a hundred or something, you know,
you're not eligible for all of them. But we were
voucherizing it every day. You know, there's vouchers for parents
is vouchers for active kids, is vouchers. The stays ones
have expired and some of the restaurant ones are not there.
But there's still vouchers for creative kids, you know, whatever
it is. And you're right, there's a landing page sort
(10:00):
of for each state government if you're in other states
as well, to sort of try and corral you into
those resources. Definitely worth a Google.
S2 (10:07):
Yeah. And I think in Melbourne, we've still got the
mid-week money or whatever it is that the Government put
in where you can get some cashback if you eat
out in the city during the week, like I've done
that a couple of times is pretty good. Yeah, you know,
it's a nice, it's a nice little chunk of cash back.
But moving on, just what's your next tip for beating
this cost of living crunch?
S1 (10:26):
Yeah, look, we touched on it a little bit there,
so my top tip, shop around on your energy bill.
I'm sorry to only deliver really bad news for people
in this episode, but electricity prices, the wholesale cost of
electricity on futures markets at least, is pointing to perhaps
a 30 to 35% hike in prices again next year
(10:48):
after they've already gone up significantly this year. So it's really,
really important that people do stay on top of their
energy bills, gas, electricity and do shop them around. And again,
the government has actually made our lives a little bit easier.
There's a separate site for Victoria where you can go
and get that energy bonus. You go to the compare
energy recovered or a new website and you collect your $250.
(11:13):
Do not go to jail, you know, Monopoly style. But
you can also punch in some of your details and
it will spit out a list for you of the
cheapest energy providers. And we've seen a lot of movement
in the market. There's little guys who are sort of
being knocked out by rising wholesale prices. All pricing is
being revisited constantly. So you've got to stay on top
of who's providing your power. For everyone else who's not
(11:35):
in Victoria, the site is energy made easy, looked after
you again, does the same thing. You just pop in
some of your usage rights, your address and it will
help you sort of see whether your current provider is
sitting at the top and you do need to look
at the details. I think it's sort of you get
the daily usage charge and the per kilowatt hour charges
and you have to compare and make sure that they're
(11:56):
really saying what they say they are and that those
prices are cheaper than your current plan. But, you know,
everyone's energy bills for winter are kind of hitting about
now as we come out of winter. So, yes, likely
if you haven't already had that bill shock, it's coming
and it's only going to get worse. So that's the
bad news. The good news is this website.
S2 (12:17):
I am I recently sort of switched over my energy
retailer because I was with one that was quite fancy
where they would just give you the flat wholesale rate.
You would pay. No, you pay subscription per month and
you just get the wholesale price of energy, which was
amazing when energy was so cheap and it my energy
bills were super, super low. And now that wholesale energy
(12:38):
prices are way up, I had to get away from them, unfortunately,
because it just got so expensive. So I recently did
a bit of a renegotiation switch around and it has
ended up saving me quite a lot of money per month.
But I was on the other end of the spectrum
where I was getting sort of directly slugged by wholesale
energy prices. Yeah.
S1 (12:55):
Ouch. I've switched about twice in the last few years
and the thing to know is, look, it's super easy.
You just go to the new retailer and say, I
want you. And they say, Great. Don't worry, I'll break
up with the old guy for you. And there's like,
there's literally nothing you have to do to tell your
old provider that you're leaving. You just hand all the
power over and, you know, it sort of gets disconnected
one day and connected straight away and my lots of
(13:17):
never gone off. Yeah.
S2 (13:18):
And there's all if you know anyone else on that provider,
make sure you go and go to them and say
what's your referral code? Because you'll both get sometimes 50,
60 bucks off your first energy bill, which is great.
So make sure you always use those referral codes because
they're the gold for, you know, just switch when you switch.
S1 (13:35):
Yeah, that seems to be more common these days. The worst,
worst sharing with your friends and having that chat. Okay, Dom.
Tip number five. What's your next tip?
S2 (13:44):
Well, this is sort of a classic, but it's always
worth thinking about, which is just cutting out any non
essential expenses. And my number one thing for this is
streaming services, because there are just so many streaming services.
It seems to be a new one every week. And
I think the thing is a lot of people get
sort of sucked into it where they get all this
service says this show, and I'm going to get a
(14:04):
free trial for it. And then they get the free
trial and then they sort of just fall into paying
for it a month. And then you might end up
with sort of, you know, four or five streaming services
where you might only really be using watching one show
or no shows on one of them. So it's really
worth sitting down and looking at something like that. You know,
I've really sort of tried to pare back the number
of streaming services and it's great because there are actually
(14:26):
some really good free ones out there at the moment,
like ABC iView. It's great. It's completely free. SBS on demand,
also completely free. They both got some really good stuff
these days. And if you have a library card, also
a great thing to have, you can get onto a
streaming service called Kanopy, which sort of has like a
mixture of like new releases, some new releases and a
(14:46):
lot of sort of older sort of, you know, very
sort of cinematic film. Buffy sort of films. So if
you're into that sort of stuff, that's, that's worth looking into.
S1 (14:55):
Oh, I haven't heard of that. How do you spell
that one?
S2 (14:57):
Ken Kanopy But it's that they spell it with a
K instead of a.
S1 (15:01):
Star, because I'm aware of like Borrow Box and Libby
apps that you can access the library books from your library,
but you can also access this sort of visual catalogs
through the P. Okay. Recording that down and.
S2 (15:13):
There's also other things like any sort of I suppose
sort of applies or any digital services like my I
was paying $10 a month for data on my Google
plan just for like storage. And I realized that I
didn't need that much. So I cut it down to
$2 a month and you know, that's a savings. And
that also applies to things like mobile phone bills, like,
you know, you can really get stuck into, especially if
(15:33):
you're on a prepaid bill, you can get stuck into
thinking that, you know, you just have to pay this
much for data and that's what you get. But there's
all there's always new people in the market, all those
new providers out there trying to offer like super low
cost cut, right. You know, plans which might suit you
better and could save you, you know, 15, 20 bucks
a month, if you're lucky.
S1 (15:52):
Yeah, a great website I use for that is whistle
outcome dot are you a seems to be good on
the sort of mobile and the internet plans.
S2 (16:00):
Yeah and I think it's the easiest way to do
something like this to look at these sort of you
know perhaps expenses that aren't particularly necessary just to go
to your banking app or you banking website download your
last month of transactions and just go through it with
print it out and go through it with a highlighter,
which will make just very a highlight.
S1 (16:17):
Of you speaking my language.
S2 (16:19):
I know. I'm sorry I'm stepping on your tongue here.
I shouldn't be.
S1 (16:22):
You did everything going on and I do everything with paper.
But yeah, well, look, sometimes. Sometimes it's time.
S2 (16:28):
It's you just. You've got to go back to basics
and really sit down, because otherwise I feel like you
can sort of they all just sort of blend into
one and become a bit much in your brain.
S1 (16:35):
Hundred per cent and yeah, I mean if people don't know,
I record everything by hand, I list out every dollar
that I spend on my spending tracker and just that
it becomes a more mindful thing to sort of have
to reflect back on the choices that you're making, not
to shame yourself about them, but just to go, Oh,
did I? Oh, when I spent ubereats and it was
$46 last night, that was about the same as, you know,
(16:56):
all those just reviewing, being aware of where the money
is going. Yeah, I love it.
S2 (17:03):
To take us home with your with the last tip.
So you will. What's your last one?
S1 (17:06):
Just speaking of Uber eats, and I suspect this is
sort of a bit of a a pinch point or
a sort of a hole in many people's budget is
the sort of quick, easy convenience food. I'm an economics writer,
but I do write a lot about food shopping, which
is is the not just because I need to eat,
we all do. But food is actually the second biggest
(17:27):
expense for Australian household budgets after the mortgage or rent.
So there's housing, there's food and then this transport. So
honing down on your food bill, being aware of where
the money is going there and in particular not sort
of spending on eating out as much. So preparing the
fresh simple foods at home is is is a strategy
(17:47):
to get into and a lot of people have or
are already pretty good at this. You know just reduce
waste shop your pantry go meatless meal plan you know
don't be sort of wasting food is is basically the
the best way to go with that but then there
are some other strategies. You know I love shopping around
with my grocery shopping. I go to Aldi, I go
(18:07):
to Costco. I still do also go to Woolies in Coles,
you know, IGA, wherever it is. I think, you know,
getting out of a rut of whatever you're used to
doing and sort of becoming a little bit more of
a savvy shopper between the different supermarkets. And so basically
focusing on your food bill is, is my final tip here.
But one other little neat trick I discovered recently, because
(18:29):
when I went to Aldi and Costco and I took
my spreadsheet and I figured out how much everything costs,
everything was about 10% cheaper at Aldi than the sort
of two major retailers. And Costco was about the same.
But then it is also possible to get a 10% discount,
particularly I know at Woolworths you can pay 59 points
per year for an everyday extra subscription or membership. So
(18:51):
it's $59 your out of pocket, but it gets you 10%
off one shop per month at both Woolies and Big W.
So you go in, you drop $200, that's about a
fortnightly shop for me, 10% off you saving $20. It
doesn't take long before you earn back the $59. So
it's sort of a way to get yourself a 10%
(19:12):
discount anyway, which would get you back to where you
were with Aldi. So, you know, that's the initial outlay,
but that's the way to save. And I have actually
heard a sneaky rumour, I haven't figured it out first,
but you can if you do the online shop first
for Woolies, you get the 10% off and then you
can maybe also use the 10% off when you go in-store.
I'm not sure if that's a loophole. Oh, I shouldn't stack.
S2 (19:34):
And stack in discounts over.
S1 (19:35):
Bubbly onto it now, but I'm going to try that
out later this month because I've already done it online. So. Yeah, look.
And finally, just on food, you know, having said prepare fresh,
healthy meals, we're all busy. We run out of time.
I actually find that having a few ready meals or
a frozen pizza or something for those nights when you
just you're going to go to Uber Eats if you don't.
So like having some ready meals on hand. You know,
(19:58):
it's it's more expensive than preparing it yourself but if
it avoids you going down the path of Uber eats
on those nights, then that can be a real money saver.
S2 (20:09):
Yeah, absolutely. And I think one of the things like
sort of in this vein that I've been to, like I,
I live by myself. You know, I, my food shop
is I can't really afford to do like a big
food shop because otherwise, like if I buy less of
fruits and vegetables, I just sort of go off by
the time I eat them. So I have to be
sort of a little bit bits and pieces around my
shopping habits. But I've been going to sort of the
(20:29):
local especially be live in the in in sort of,
you know, most most parts of Melbourne. My sort of
shopping centres in Melbourne will have big supermarkets then also
like a little fruit and veggie sort of local grocer place.
Those places I find can be quite a lot cheaper
then then you big to supermarkets if you have sort
of you know, and they've got really high quality produce too.
(20:51):
So I get pretty much all my fruit and vegetable
from my local little greengrocer and it's quite a bit cheaper.
So that's something I think I would recommend as well.
If people are looking to save a bit of money
specifically on vegetables.
S1 (21:01):
Yeah. Oh, interesting. I would assume it would. You know,
the bigger guys would have bigger buying power, but maybe
you're getting the wholesale price from the little guy. Yeah,
I'm not quite sure.
S2 (21:10):
I think I think the the little guys go directly
to the markets and buy it straight from the sort
of the, you know, off the back of the truck
sort of thing. So I think yeah, they, they save
a bit of money that way. I don't know, I
don't know why it's cheaper necessarily and it's not like
hugely cheaper like I'm not saving massive amounts of, of money,
but it is definitely it is definitely noticeably cheaper.
S1 (21:29):
Yeah. Excellent. Well shall we quickly recap then, the six tips. Yes.
Number one, ask for a pay rise. Number two, get
out your private health insurance statement and and review your
cover number three, vehicle, your local state government and concessions
to see what you're eligible for.
S2 (21:45):
Number four, shop around on your energy bill. Number five,
make sure you cut out any non-essential expenses. We're talking
streaming services. We're talking, you know, access dollar on your
mobile phone bills, all things like that. And then number six,
sit down and focus on your food bill and see
if there's any way that you can save a little
bit of money each week by shopping around.
S1 (22:02):
Great. So we we hope that helps you. It doesn't
obviously undo the effect of rising prices, but really, it's
the time to get a little bit more active and
follow some of those strategies, at least that we're suggesting
you can undo a little bit of the rising price
pressure that's out there. So onto our listener question of
the week, and thank you for all your questions. We're
getting some great ones through. Do keep emailing us at
(22:25):
it all adds up at Nine.com.au Air. We love getting
your questions. And this week's question is from Nicky. Can
you share a simple set and forget investment for kids
where we can invest to put towards like their first
car or first apartment? So Dom, are there any simple
solutions for people investing for their kids?
S2 (22:44):
I've said it once and I'll say it again. This
is there's a scene in the Alvin and the Chipmunks
movie where they talk about exactly this, and he buys
the Chipmunks bonds for their first Christmas. Anyway, that's that's
sort of a by the by I'm not saying that
you should buy your kids bonds, but that is that
is possibly an option. So you could like you could
invest on behalf of your child. You could put money
(23:06):
aside in bonds or stable sort of index ETFs or,
you know, really long term investment, especially if you're not
thinking that good thinking, they're not going to sort of
tap into this investment for, you know, a number of years.
And that's certainly a strategy, but obviously that has tax implications.
S1 (23:22):
ROGERS Yeah, I presume Alvin and the Chipmunks didn't go
into the capital gains tax implications of the beneficiary holders
of the bond.
S2 (23:31):
The movie would have been much better if they had
to be on.
S1 (23:34):
I agree. But yeah, with all those things, like there
are like investment bonds, if you Google that, there's different
tax treatment for that. If you're doing things like ETFs
or micro investing apps, you've got to look at, you know,
there's actually it's not minors under 18 and allowed to
own shares in their own names, or at least on
some readings of a law they can't. So you would
(23:57):
actually be still the owner of the asset and the
decision maker, perhaps, although if the kids earn some of
the income, perhaps they can get a different tax treatment.
There's this hugely complicated tax system surrounding investing on behalf
of your kids, which I'm still trying to get my
head around. So, I mean, I'm sort of focusing on just,
you know, increasing my wealth so that I'm not a
(24:19):
drain on on him when when I retire so that
I'm covered and holding assets in my name. But I
would love to have a simple solution to allow my
eight year old to sort of go invest in the
share market. But you can't It's really not as they
make it hard.
S2 (24:34):
Yeah, and I think this is why you see a
lot of banks offering accounts for kids that have very
high interest rates because I think, you know, putting money
into a account in a child's name that has a
high interest rate is like is a simple saving that
is probably one of the easiest ways you can do it.
You're not going to get huge returns because, you know,
even though interest rates are going up, they're not going
(24:55):
up massively. But it is probably the sort of easiest,
least tax implication sort of way to invest on behalf
of your kid.
S1 (25:03):
Yeah, there is this amazing thing called interest again, where
you can earn interest by putting your money in the
bank who you like because you couldn't do that for
a few years. So I'm sort of leaning towards, you know,
just explaining the benefits of savings in terms of getting
interest and compounding interest just on a bank account being
something you can do for your kids again. And we
would mention or I could mention the the 4% rate
(25:23):
was the Bank of Queensland, right? Actually only for 15
to 35 year olds, I think it was. But yeah,
we are starting to see those savings rates nudge above 4%,
so that would probably be the simplest way. Then I'm
not sure if the interest would be declared on the
kids tax return or on your tax returns. So again,
the tax implications. Yeah, well we're talking to a tax
(25:44):
your accountant about anyway. Unfortunately, it's not so, so simple
that the kids you know because they don't know their
income they'll be on low thresholds for tax you know
that whether you can keep the income and then I'm
all yours who knows? I will keep I'm meaning to
write a column on this. So stay stay tuned.
S2 (26:03):
And just take us home. Just what is your budget
tip of the week?
S1 (26:07):
My budget tip. I've been teasing this. If you listen
to the teaser for this entire podcast, go back. I
did mention a toilet paper related budget saving tip, which
I thought we can't keep the people in suspense, but.
S2 (26:20):
I've been very excited to hear it.
S1 (26:23):
This one. I got this from a money savings expert
from the UK. There's a whole Facebook group, so I
can't claim credit, but it's a tip to help you
slow your roll down. So are you a scrunchie or
a folder?
S2 (26:37):
The very personal questions coming out towards the end of
the podcast. Here I am a scrunched, scrunched toilet paper.
I'm hoping you're talking about toilet paper.
S1 (26:46):
I am. I don't know what other context I could
apply to, but in this instant, yes, it's crunchier. Okay. Well,
I mean, what is input? Because you know, a folder type.
I'm also scrunch to a folder type people. You know,
maybe you're just Yeah, I imagine these sorts of people
would just be tearing off your one. Two two modest
pieces of toilet paper, folding them gently in their hands
(27:07):
and applying gentle pressure. You know, like it's a whole
strategic thing. Other people, you just, you know, you're reaching
for the roll and you just watch it, you know,
spin the dice, roll that. You know, it's kind of
satisfying anyway. It's a way to waste money. We want
to save money on toilet paper. This is where I'm heading.
A trick is you can actually get that before you
put it on the hold it. Get your toilet paper,
rolls everyone, and smooch them. Give them a good old
(27:28):
crush and crush that sealant, the cardboard cylinder inside the roll.
And this is probably good for kids. If it's your
kids who are actually the ones spinning the wheel of
fortune and using the the toilet paper. And that will
just slow your all. It literally slows your off because
it doesn't go around.
S2 (27:45):
It's just it just it's a bit lumpy.
S1 (27:47):
It created some friction in your toilet. Interesting. I've this
has gone on much longer than it needed to go. No,
I mean it's a good tip. And you know, there's
there's people out there who showed up in roles. We're
not so very far out from the COVID, you know,
toilet paper related shortages. And, you know, I'm still conscious
of my toilet paper use. And yes, it's one way
(28:08):
you can cut costs.
S2 (28:10):
Yes. Or you can become one of those dirty folders.
I never understood those sort of people.
S1 (28:14):
I don't understand why.
S2 (28:16):
What you're not if you're not scrunching your toilet paper,
you're not living.
S1 (28:19):
You've got too much time on your hands.
S2 (28:20):
Absolutely.
S1 (28:21):
Getting it in the get out.
S2 (28:23):
And on that note, we'll leave you this week. Please
email us any other questions you may have for this
week and let us know if you're a folder or
a scrunch. We will not publish that data, but it's
always interesting to find out. But thanks for joining us.
Thanks for listening and we'll see you again next week.
S1 (28:37):
It's been fun.
S2 (28:38):
Thanks to this episode of It All Adds Up was
produced by Chee Wong. The information discussed is general in
nature and does not take into account your personal financial situation,
goals or objectives. You should always do your own research
or get professional advice before making any major financial decisions.
If you like today's episode, hit follow a new podcast app,
(29:00):
leave a review and recommend it to all your friends.
You can also submit your listener questions in text or
audio form at. It all adds up at 9:00 PM today.
Thanks for listening.
Hello and welcome to It All Adds Up the podcast
where we chat about money, how to get it, how
to spend it, and how to invest it. I'm senior
economics writer Jess Irvine, and you're listening to our summer series,
where we're replaying some of our hottest hits to help
you get in shipshape financial form for 2023. It all
adds Up will resume normal programming in February with a
(00:21):
brand new season full of money saving tips and insights.
So until then, sit back, relax and enjoy. Hello and
welcome to It All Adds Up the podcast where we
chat about money, how to get it, how to spend
(00:42):
it and how to invest it. I'm senior economics writer
Jess Irvine.
S2 (00:46):
And I'm money editor, Dumb Pal. And this week we've
got some tips to try and help you beat the
cost of Living Crunch.
S1 (00:51):
Yeah, everyone is feeling the pinch right now. We know,
of course, that interest rates have risen at their fastest
pace since the 1990s, which increases the pressure on home owners.
But the rental market dollar is little better, with double
digit rises in rents in both Sydney and Melbourne over
the past year. And of course we know at the
same time general inflation is just rampant and expected to
(01:13):
get worse before it gets better.
S2 (01:15):
Yeah, it's a really peachy sort of outlook we're painting here,
but we're not battling at least with a $12 lettuce any. Those,
those days are over, but the cost of your weekly
shop is still rising because the cost of everything is
is rising. And every other expense, it seems, is also
going up. You've got petrol, energy bills, insurance. They're all rising.
So I guess the question is what can we do
(01:37):
about it, really?
S1 (01:38):
I came up with an innovative solution, which is you
could migrate to China because we had all our foreign
correspondents report back on inflation from across the world, and
China is keeping its inflation under control. But they are
still living under lockdown and the economy is not doing
very well. Yeah, And also, like, you know, part of
the reason why inflation is so high is because the
jobless rate is low. And, you know, we've we've got
a fairly strong resurgent economy. So it's like, do you
(02:01):
want your good news or bad news? The bad news, however,
is that it's just getting super expensive to live, isn't it?
S2 (02:08):
It is.
S1 (02:08):
So dumb. Let's help people. I think this is good.
We're just going to do like a snazzy, quick six
tips that you can sort of apply today and, you know,
maybe give you some of that relief that that you're
looking for because it can all seem a little bit overwhelming. So, Dom,
you're going to kick us off. What's what's your best
tip or your first tip, anyway, for dealing with the
rising cost of living?
S2 (02:29):
My first tip is if you're struggling with the cost
of living, the best way to not struggle with the
cost of living is to increase the amount of income
you have. So you should, if you have a job,
go and ask your boss for a pay rise. We
talked about this in our second episode, I believe. So
if you want sort of sort of really in-depth tips
on how to do that, go back and listen to that,
that episode. But it is the number one way to
(02:51):
sort of increase your income is to to ask for
a pay rise. You know, obviously, this isn't applicable to
everyone if you're on sort of jobseeker or a pension
or something like that, you obviously can't ask for for
a pay rise. But with the cost of living, you know,
it is you're perfectly within your rights to go and
go and say, hi, I'm struggling with this or, you know, my,
my productions increased or I'm gone. Additional responsibilities. I'd like
(03:14):
to be paid more. And it is you know, the
least you can do is ask. And if it works,
it works. If it doesn't, it doesn't.
S1 (03:20):
Yeah. Thank you for having this is the first tip
because we spend so much time, like how can we
trim our expenses and save on takeaway coffee? But if
you can go get your pay yourself a pay rise
that's worth a couple of thousand dollars a year, that's
really good. And just go in armed knowing that unemployment
is still at its lowest in about half a century.
Like that is what's creating the pressure in part is that,
(03:40):
you know, if you if your current boss can't stump
up the cash, it's never been easier for 50 years
or so to go and get another job. So it
doesn't work for everyone. And you've got to make sure
it's the stars are aligned and you don't just walk
into the office one day and say, I'm done without
a job to go to. But it's definitely a time
to be testing the waters and looking around.
S2 (04:01):
Yeah, absolutely. And especially if you're in one of those
in-demand jobs, like, you know, one of my mates is
a Kota, and he recently looked for a job and
he got about four job offers. So, you know, it's
it's one of those things that if you're in the
in the right field, you really have a lot of
bargaining power and you should be swinging that weight around
as much as you can.
S1 (04:18):
Yeah. And even at that lower end, like sort of
more the retail, hospitality, food services, there's still real staff
shortages there because migrations for students are not quite back
where they were. So across the spectrum, it's a good
time to throw your weight around a little bit.
S2 (04:32):
Absolutely. But if you can't get yourself a pay rise,
just what should you try instead? What's your tip?
S1 (04:37):
Yeah, well, moving on, I guess, to the expenses side
of thing. And here's my tip. The biggest thing, I
think most people could just go and have a little
look at their figures today will be to have a
look at the cost of private health insurance. So we
know it's just gone up massively. You know, even before
the cost of living crisis, we were feeling the pinch
on those premiums. And I share all my figures on Instagram.
(04:58):
The money was Jessica and I always putting there my
monthly health insurance. I pay a premium of 80.49 per
month and people are always like, How do you get
it that cheap? That seems pretty low and it is
just for one individual. But how much do you pay
in premiums still?
S2 (05:13):
Well, I don't have private health insurer.
S1 (05:15):
Well, that's one way to say, oh, no. Yeah, well,
tell me, because, you know, the major question for people
is how much they earn. Because if you earn over
certain amounts, it's $90,000 for singles, $180,000 for couples. If
you don't have private health insurance, you're going to get
slugged with a medicare levy. So. Charge, which starts at 1%
of your income, goes up to 1.5. So are you
(05:36):
over that 90,000?
S2 (05:38):
Look, I am over the 90,000 barrier, but like I,
I don't know. It's for me, this one of these
sort of things where it's like the it's either this 1%
that sort of comes out of my tax. Right. The
sort of thing that I don't really notice that much
or it's like a straight. $90 every month that comes
out of my account. So I was like, it's sort
of like a mental thing for me, I guess. So
that makes sense.
S1 (05:58):
Oh yeah. But we'll do the numbers after this will
take you aside because you can get like an annual
basic level private health insurance policy, just basic level hospital.
And all you need is hospital. People think, oh, to
avoid the surcharge, I need extras as well. You don't.
You just need that basic hospital. And so I'm paying
like less than $1,000 a year for my premiums. Whereas
(06:21):
you will find, depending on your income, you'll be charged
even more than that in tax. So you might about
feel like it's painful being debited from your account, but
it's going to hit you at tax time. John. I'm
all right. So, I mean, just for everyone to to
check where you're at with your income, do you have
a policy? I literally just ring up insurers and say, hey, dude,
this is a tax dodge for me. I'm trying to
(06:42):
avoid paying the Medicare levy surcharge. I don't want your
bells and whistles. What is the cheapest policy you can
give me? Which means I will avoid the surcharge. And
then another thing I do to make it cheaper, you know,
I'm on the basic level, the silver and gold, but,
you know, I'm a healthy, relatively healthy young person. And
for me, I'm willing to take the risk that I
might incur some out of pocket costs or, you know,
(07:02):
I will fall back on the public system if I
if I don't have that maximum level of cover for
some things. And the other thing is I pay the
maximum excess. So you check what your excess is set at.
It increased recently that use for singles, it can be
set to $750 and that's how much you agree to
pay out of pocket in the event that you do
need to make a claim. So you know it's going
(07:23):
to hit you, but it makes the premiums much cheaper.
And they those excesses went up. The government mandates what
they must be. They went up a few years ago.
So if you haven't reviewed it for a couple of
years to check where your excess is at, check that
you're not being covered for, you know, pregnancy or something
that you don't need anymore. And really, I think people
spend thousands of dollars per year private health insurance. It's
(07:43):
worth having a look at your policy, bringing around just
checking that you're not sort of paying for something that
you don't get value from.
S2 (07:49):
But I'll go and I'll go and tally the numbers
and see if it's something that that's worth.
S1 (07:53):
Yeah, I'll help you will report, will report back. So, Don,
what's your next tip for Cost of living Relief?
S2 (08:00):
My next tip is looking at all the concessions and
rebates that you may be eligible for from either the
federal or state government. And I think the easiest way
to do this is going on to good old fashioned
Google and just typing in eligible concessions Victoria, New South Wales, Queensland,
whatever state you live in. And as far as I
(08:21):
can tell, I think all or at least most of
the state and territory governments have a website where you
can go on and they've just got the full list
of all the concessions and rebates that you could possibly
be eligible for. New South Wales either has a little
calculator you can do where you can type in all
your details. I mean it will literally just give you
a list of everything that you may be able to claim. Obviously,
(08:42):
like there's some big major ones which if you haven't
claimed yet, you should absolutely get on to like the
$250 energy rebate for Victorians. I would assume or hope
by now that most of our listeners have, if you're Victorian,
have claimed that $250 because it is just $200 in
your bank account, all you have to do is go
and compare your energy providers. It's so easy. So that's
(09:03):
definitely something you should do. But there's all these other
things you can get, like can get energy and gas rebates,
you can get public transport concessions, you can get relief
for toll roads like the payments you make on toll roads.
If you use a certain you know, if your toll
bill goes over a certain amount each week, like there's
a lot of things out there that I think people
don't realise that they could be saving money on from
the government, you know, and pretty low effort, pretty easy
(09:25):
to do. You just have to be eligible and apply
and you can get quite significant savings. So I think
that's a really good thing for people to look at,
especially if you're sort of really doing it tough. There
are a lot of things that the government will help
you out with in that sort of sphere.
S1 (09:38):
Yeah, the New South Wales Government has sort of gone
nuts on that. You know, you go to the website
is sort of up to a hundred or something, you know,
you're not eligible for all of them. But we were
voucherizing it every day. You know, there's vouchers for parents
is vouchers for active kids, is vouchers. The stays ones
have expired and some of the restaurant ones are not there.
But there's still vouchers for creative kids, you know, whatever
it is. And you're right, there's a landing page sort
(10:00):
of for each state government if you're in other states
as well, to sort of try and corral you into
those resources. Definitely worth a Google.
S2 (10:07):
Yeah. And I think in Melbourne, we've still got the
mid-week money or whatever it is that the Government put
in where you can get some cashback if you eat
out in the city during the week, like I've done
that a couple of times is pretty good. Yeah, you know,
it's a nice, it's a nice little chunk of cash back.
But moving on, just what's your next tip for beating
this cost of living crunch?
S1 (10:26):
Yeah, look, we touched on it a little bit there,
so my top tip, shop around on your energy bill.
I'm sorry to only deliver really bad news for people
in this episode, but electricity prices, the wholesale cost of
electricity on futures markets at least, is pointing to perhaps
a 30 to 35% hike in prices again next year
(10:48):
after they've already gone up significantly this year. So it's really,
really important that people do stay on top of their
energy bills, gas, electricity and do shop them around. And again,
the government has actually made our lives a little bit easier.
There's a separate site for Victoria where you can go
and get that energy bonus. You go to the compare
energy recovered or a new website and you collect your $250.
(11:13):
Do not go to jail, you know, Monopoly style. But
you can also punch in some of your details and
it will spit out a list for you of the
cheapest energy providers. And we've seen a lot of movement
in the market. There's little guys who are sort of
being knocked out by rising wholesale prices. All pricing is
being revisited constantly. So you've got to stay on top
of who's providing your power. For everyone else who's not
(11:35):
in Victoria, the site is energy made easy, looked after
you again, does the same thing. You just pop in
some of your usage rights, your address and it will
help you sort of see whether your current provider is
sitting at the top and you do need to look
at the details. I think it's sort of you get
the daily usage charge and the per kilowatt hour charges
and you have to compare and make sure that they're
(11:56):
really saying what they say they are and that those
prices are cheaper than your current plan. But, you know,
everyone's energy bills for winter are kind of hitting about
now as we come out of winter. So, yes, likely
if you haven't already had that bill shock, it's coming
and it's only going to get worse. So that's the
bad news. The good news is this website.
S2 (12:17):
I am I recently sort of switched over my energy
retailer because I was with one that was quite fancy
where they would just give you the flat wholesale rate.
You would pay. No, you pay subscription per month and
you just get the wholesale price of energy, which was
amazing when energy was so cheap and it my energy
bills were super, super low. And now that wholesale energy
(12:38):
prices are way up, I had to get away from them, unfortunately,
because it just got so expensive. So I recently did
a bit of a renegotiation switch around and it has
ended up saving me quite a lot of money per month.
But I was on the other end of the spectrum
where I was getting sort of directly slugged by wholesale
energy prices. Yeah.
S1 (12:55):
Ouch. I've switched about twice in the last few years
and the thing to know is, look, it's super easy.
You just go to the new retailer and say, I
want you. And they say, Great. Don't worry, I'll break
up with the old guy for you. And there's like,
there's literally nothing you have to do to tell your
old provider that you're leaving. You just hand all the
power over and, you know, it sort of gets disconnected
one day and connected straight away and my lots of
(13:17):
never gone off. Yeah.
S2 (13:18):
And there's all if you know anyone else on that provider,
make sure you go and go to them and say
what's your referral code? Because you'll both get sometimes 50,
60 bucks off your first energy bill, which is great.
So make sure you always use those referral codes because
they're the gold for, you know, just switch when you switch.
S1 (13:35):
Yeah, that seems to be more common these days. The worst,
worst sharing with your friends and having that chat. Okay, Dom.
Tip number five. What's your next tip?
S2 (13:44):
Well, this is sort of a classic, but it's always
worth thinking about, which is just cutting out any non
essential expenses. And my number one thing for this is
streaming services, because there are just so many streaming services.
It seems to be a new one every week. And
I think the thing is a lot of people get
sort of sucked into it where they get all this
service says this show, and I'm going to get a
(14:04):
free trial for it. And then they get the free
trial and then they sort of just fall into paying
for it a month. And then you might end up
with sort of, you know, four or five streaming services
where you might only really be using watching one show
or no shows on one of them. So it's really
worth sitting down and looking at something like that. You know,
I've really sort of tried to pare back the number
of streaming services and it's great because there are actually
(14:26):
some really good free ones out there at the moment,
like ABC iView. It's great. It's completely free. SBS on demand,
also completely free. They both got some really good stuff
these days. And if you have a library card, also
a great thing to have, you can get onto a
streaming service called Kanopy, which sort of has like a
mixture of like new releases, some new releases and a
(14:46):
lot of sort of older sort of, you know, very
sort of cinematic film. Buffy sort of films. So if
you're into that sort of stuff, that's, that's worth looking into.
S1 (14:55):
Oh, I haven't heard of that. How do you spell
that one?
S2 (14:57):
Ken Kanopy But it's that they spell it with a
K instead of a.
S1 (15:01):
Star, because I'm aware of like Borrow Box and Libby
apps that you can access the library books from your library,
but you can also access this sort of visual catalogs
through the P. Okay. Recording that down and.
S2 (15:13):
There's also other things like any sort of I suppose
sort of applies or any digital services like my I
was paying $10 a month for data on my Google
plan just for like storage. And I realized that I
didn't need that much. So I cut it down to
$2 a month and you know, that's a savings. And
that also applies to things like mobile phone bills, like,
you know, you can really get stuck into, especially if
(15:33):
you're on a prepaid bill, you can get stuck into
thinking that, you know, you just have to pay this
much for data and that's what you get. But there's
all there's always new people in the market, all those
new providers out there trying to offer like super low
cost cut, right. You know, plans which might suit you
better and could save you, you know, 15, 20 bucks
a month, if you're lucky.
S1 (15:52):
Yeah, a great website I use for that is whistle
outcome dot are you a seems to be good on
the sort of mobile and the internet plans.
S2 (16:00):
Yeah and I think it's the easiest way to do
something like this to look at these sort of you
know perhaps expenses that aren't particularly necessary just to go
to your banking app or you banking website download your
last month of transactions and just go through it with
print it out and go through it with a highlighter,
which will make just very a highlight.
S1 (16:17):
Of you speaking my language.
S2 (16:19):
I know. I'm sorry I'm stepping on your tongue here.
I shouldn't be.
S1 (16:22):
You did everything going on and I do everything with paper.
But yeah, well, look, sometimes. Sometimes it's time.
S2 (16:28):
It's you just. You've got to go back to basics
and really sit down, because otherwise I feel like you
can sort of they all just sort of blend into
one and become a bit much in your brain.
S1 (16:35):
Hundred per cent and yeah, I mean if people don't know,
I record everything by hand, I list out every dollar
that I spend on my spending tracker and just that
it becomes a more mindful thing to sort of have
to reflect back on the choices that you're making, not
to shame yourself about them, but just to go, Oh,
did I? Oh, when I spent ubereats and it was
$46 last night, that was about the same as, you know,
(16:56):
all those just reviewing, being aware of where the money
is going. Yeah, I love it.
S2 (17:03):
To take us home with your with the last tip.
So you will. What's your last one?
S1 (17:06):
Just speaking of Uber eats, and I suspect this is
sort of a bit of a a pinch point or
a sort of a hole in many people's budget is
the sort of quick, easy convenience food. I'm an economics writer,
but I do write a lot about food shopping, which
is is the not just because I need to eat,
we all do. But food is actually the second biggest
(17:27):
expense for Australian household budgets after the mortgage or rent.
So there's housing, there's food and then this transport. So
honing down on your food bill, being aware of where
the money is going there and in particular not sort
of spending on eating out as much. So preparing the
fresh simple foods at home is is is a strategy
(17:47):
to get into and a lot of people have or
are already pretty good at this. You know just reduce
waste shop your pantry go meatless meal plan you know
don't be sort of wasting food is is basically the
the best way to go with that but then there
are some other strategies. You know I love shopping around
with my grocery shopping. I go to Aldi, I go
(18:07):
to Costco. I still do also go to Woolies in Coles,
you know, IGA, wherever it is. I think, you know,
getting out of a rut of whatever you're used to
doing and sort of becoming a little bit more of
a savvy shopper between the different supermarkets. And so basically
focusing on your food bill is, is my final tip here.
But one other little neat trick I discovered recently, because
(18:29):
when I went to Aldi and Costco and I took
my spreadsheet and I figured out how much everything costs,
everything was about 10% cheaper at Aldi than the sort
of two major retailers. And Costco was about the same.
But then it is also possible to get a 10% discount,
particularly I know at Woolworths you can pay 59 points
per year for an everyday extra subscription or membership. So
(18:51):
it's $59 your out of pocket, but it gets you 10%
off one shop per month at both Woolies and Big W.
So you go in, you drop $200, that's about a
fortnightly shop for me, 10% off you saving $20. It
doesn't take long before you earn back the $59. So
it's sort of a way to get yourself a 10%
(19:12):
discount anyway, which would get you back to where you
were with Aldi. So, you know, that's the initial outlay,
but that's the way to save. And I have actually
heard a sneaky rumour, I haven't figured it out first,
but you can if you do the online shop first
for Woolies, you get the 10% off and then you
can maybe also use the 10% off when you go in-store.
I'm not sure if that's a loophole. Oh, I shouldn't stack.
S2 (19:34):
And stack in discounts over.
S1 (19:35):
Bubbly onto it now, but I'm going to try that
out later this month because I've already done it online. So. Yeah, look.
And finally, just on food, you know, having said prepare fresh,
healthy meals, we're all busy. We run out of time.
I actually find that having a few ready meals or
a frozen pizza or something for those nights when you
just you're going to go to Uber Eats if you don't.
So like having some ready meals on hand. You know,
(19:58):
it's it's more expensive than preparing it yourself but if
it avoids you going down the path of Uber eats
on those nights, then that can be a real money saver.
S2 (20:09):
Yeah, absolutely. And I think one of the things like
sort of in this vein that I've been to, like I,
I live by myself. You know, I, my food shop
is I can't really afford to do like a big
food shop because otherwise, like if I buy less of
fruits and vegetables, I just sort of go off by
the time I eat them. So I have to be
sort of a little bit bits and pieces around my
shopping habits. But I've been going to sort of the
(20:29):
local especially be live in the in in sort of,
you know, most most parts of Melbourne. My sort of
shopping centres in Melbourne will have big supermarkets then also
like a little fruit and veggie sort of local grocer place.
Those places I find can be quite a lot cheaper
then then you big to supermarkets if you have sort
of you know, and they've got really high quality produce too.
(20:51):
So I get pretty much all my fruit and vegetable
from my local little greengrocer and it's quite a bit cheaper.
So that's something I think I would recommend as well.
If people are looking to save a bit of money
specifically on vegetables.
S1 (21:01):
Yeah. Oh, interesting. I would assume it would. You know,
the bigger guys would have bigger buying power, but maybe
you're getting the wholesale price from the little guy. Yeah,
I'm not quite sure.
S2 (21:10):
I think I think the the little guys go directly
to the markets and buy it straight from the sort
of the, you know, off the back of the truck
sort of thing. So I think yeah, they, they save
a bit of money that way. I don't know, I
don't know why it's cheaper necessarily and it's not like
hugely cheaper like I'm not saving massive amounts of, of money,
but it is definitely it is definitely noticeably cheaper.
S1 (21:29):
Yeah. Excellent. Well shall we quickly recap then, the six tips. Yes.
Number one, ask for a pay rise. Number two, get
out your private health insurance statement and and review your
cover number three, vehicle, your local state government and concessions
to see what you're eligible for.
S2 (21:45):
Number four, shop around on your energy bill. Number five,
make sure you cut out any non-essential expenses. We're talking
streaming services. We're talking, you know, access dollar on your
mobile phone bills, all things like that. And then number six,
sit down and focus on your food bill and see
if there's any way that you can save a little
bit of money each week by shopping around.
S1 (22:02):
Great. So we we hope that helps you. It doesn't
obviously undo the effect of rising prices, but really, it's
the time to get a little bit more active and
follow some of those strategies, at least that we're suggesting
you can undo a little bit of the rising price
pressure that's out there. So onto our listener question of
the week, and thank you for all your questions. We're
getting some great ones through. Do keep emailing us at
(22:25):
it all adds up at Nine.com.au Air. We love getting
your questions. And this week's question is from Nicky. Can
you share a simple set and forget investment for kids
where we can invest to put towards like their first
car or first apartment? So Dom, are there any simple
solutions for people investing for their kids?
S2 (22:44):
I've said it once and I'll say it again. This
is there's a scene in the Alvin and the Chipmunks
movie where they talk about exactly this, and he buys
the Chipmunks bonds for their first Christmas. Anyway, that's that's
sort of a by the by I'm not saying that
you should buy your kids bonds, but that is that
is possibly an option. So you could like you could
invest on behalf of your child. You could put money
(23:06):
aside in bonds or stable sort of index ETFs or,
you know, really long term investment, especially if you're not
thinking that good thinking, they're not going to sort of
tap into this investment for, you know, a number of years.
And that's certainly a strategy, but obviously that has tax implications.
S1 (23:22):
ROGERS Yeah, I presume Alvin and the Chipmunks didn't go
into the capital gains tax implications of the beneficiary holders
of the bond.
S2 (23:31):
The movie would have been much better if they had
to be on.
S1 (23:34):
I agree. But yeah, with all those things, like there
are like investment bonds, if you Google that, there's different
tax treatment for that. If you're doing things like ETFs
or micro investing apps, you've got to look at, you know,
there's actually it's not minors under 18 and allowed to
own shares in their own names, or at least on
some readings of a law they can't. So you would
(23:57):
actually be still the owner of the asset and the
decision maker, perhaps, although if the kids earn some of
the income, perhaps they can get a different tax treatment.
There's this hugely complicated tax system surrounding investing on behalf
of your kids, which I'm still trying to get my
head around. So, I mean, I'm sort of focusing on just,
you know, increasing my wealth so that I'm not a
(24:19):
drain on on him when when I retire so that
I'm covered and holding assets in my name. But I
would love to have a simple solution to allow my
eight year old to sort of go invest in the
share market. But you can't It's really not as they
make it hard.
S2 (24:34):
Yeah, and I think this is why you see a
lot of banks offering accounts for kids that have very
high interest rates because I think, you know, putting money
into a account in a child's name that has a
high interest rate is like is a simple saving that
is probably one of the easiest ways you can do it.
You're not going to get huge returns because, you know,
even though interest rates are going up, they're not going
(24:55):
up massively. But it is probably the sort of easiest,
least tax implication sort of way to invest on behalf
of your kid.
S1 (25:03):
Yeah, there is this amazing thing called interest again, where
you can earn interest by putting your money in the
bank who you like because you couldn't do that for
a few years. So I'm sort of leaning towards, you know,
just explaining the benefits of savings in terms of getting
interest and compounding interest just on a bank account being
something you can do for your kids again. And we
would mention or I could mention the the 4% rate
(25:23):
was the Bank of Queensland, right? Actually only for 15
to 35 year olds, I think it was. But yeah,
we are starting to see those savings rates nudge above 4%,
so that would probably be the simplest way. Then I'm
not sure if the interest would be declared on the
kids tax return or on your tax returns. So again,
the tax implications. Yeah, well we're talking to a tax
(25:44):
your accountant about anyway. Unfortunately, it's not so, so simple
that the kids you know because they don't know their
income they'll be on low thresholds for tax you know
that whether you can keep the income and then I'm
all yours who knows? I will keep I'm meaning to
write a column on this. So stay stay tuned.
S2 (26:03):
And just take us home. Just what is your budget
tip of the week?
S1 (26:07):
My budget tip. I've been teasing this. If you listen
to the teaser for this entire podcast, go back. I
did mention a toilet paper related budget saving tip, which
I thought we can't keep the people in suspense, but.
S2 (26:20):
I've been very excited to hear it.
S1 (26:23):
This one. I got this from a money savings expert
from the UK. There's a whole Facebook group, so I
can't claim credit, but it's a tip to help you
slow your roll down. So are you a scrunchie or
a folder?
S2 (26:37):
The very personal questions coming out towards the end of
the podcast. Here I am a scrunched, scrunched toilet paper.
I'm hoping you're talking about toilet paper.
S1 (26:46):
I am. I don't know what other context I could
apply to, but in this instant, yes, it's crunchier. Okay. Well,
I mean, what is input? Because you know, a folder type.
I'm also scrunch to a folder type people. You know,
maybe you're just Yeah, I imagine these sorts of people
would just be tearing off your one. Two two modest
pieces of toilet paper, folding them gently in their hands
(27:07):
and applying gentle pressure. You know, like it's a whole
strategic thing. Other people, you just, you know, you're reaching
for the roll and you just watch it, you know,
spin the dice, roll that. You know, it's kind of
satisfying anyway. It's a way to waste money. We want
to save money on toilet paper. This is where I'm heading.
A trick is you can actually get that before you
put it on the hold it. Get your toilet paper,
rolls everyone, and smooch them. Give them a good old
(27:28):
crush and crush that sealant, the cardboard cylinder inside the roll.
And this is probably good for kids. If it's your
kids who are actually the ones spinning the wheel of
fortune and using the the toilet paper. And that will
just slow your all. It literally slows your off because
it doesn't go around.
S2 (27:45):
It's just it just it's a bit lumpy.
S1 (27:47):
It created some friction in your toilet. Interesting. I've this
has gone on much longer than it needed to go. No,
I mean it's a good tip. And you know, there's
there's people out there who showed up in roles. We're
not so very far out from the COVID, you know,
toilet paper related shortages. And, you know, I'm still conscious
of my toilet paper use. And yes, it's one way
(28:08):
you can cut costs.
S2 (28:10):
Yes. Or you can become one of those dirty folders.
I never understood those sort of people.
S1 (28:14):
I don't understand why.
S2 (28:16):
What you're not if you're not scrunching your toilet paper,
you're not living.
S1 (28:19):
You've got too much time on your hands.
S2 (28:20):
Absolutely.
S1 (28:21):
Getting it in the get out.
S2 (28:23):
And on that note, we'll leave you this week. Please
email us any other questions you may have for this
week and let us know if you're a folder or
a scrunch. We will not publish that data, but it's
always interesting to find out. But thanks for joining us.
Thanks for listening and we'll see you again next week.
S1 (28:37):
It's been fun.
S2 (28:38):
Thanks to this episode of It All Adds Up was
produced by Chee Wong. The information discussed is general in
nature and does not take into account your personal financial situation,
goals or objectives. You should always do your own research
or get professional advice before making any major financial decisions.
If you like today's episode, hit follow a new podcast app,
(29:00):
leave a review and recommend it to all your friends.
You can also submit your listener questions in text or
audio form at. It all adds up at 9:00 PM today.
Thanks for listening.
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