When it comes to living expenses, South Australians should brace themselves for a rough ride over the next 12 months.
Households will have to contend with a raft of cost of living increases – everything from transport to utility costs. But careful planning and shopping around can minimise the impact.
Where are costs rising?
As of July 1 2016, public transport fares, vehicle registration, drivers’ licence renewals and speeding fines in South Australia increased by a combined average of 1.7 per cent. A regular 28-day public transport pass now costs $121.80, while vehicle registration fees on a five or six cylinder car comes in at $247 a quarter.
At the beginning of the 2016-2017 financial year, electricity and gas costs in South Australia – which are already the highest in the country – rose further with power company Origin Energy increasing its bills by 6.5 per cent, equating to $117 per year. While AGL increased its prices by 10 per cent, adding an extra $230 extra per year.
Private health insurance premiums also increased an average of almost six per cent from April 2016, meaning the average family is now paying about $300 more a year for an average policy.
At the same time, households will continue to feel cost pressures in other areas of their budgets, including petrol, water and council rates.
What can you do?
We asked Amanda Vater, Manager of Salisbury’s Good Money community finance store, for some practical tips on beating the cost hikes. Here’s what she told us
Seek a better deal
Amanda suggests that you speak to energy, gas and health insurance providers to see if you can get a better deal.
“If you can save $10 a week on your utility expenses and health insurance, that’s over $500 a year,” she said.
“The Australian Energy Regulator’s site Energy Made Easy has online comparison tools to help you to compare the price of different energy providers, contract lengths, discounts and fees. They’ll help you make an informed decision about what suits your needs.”
For private health insurers, Amanda said there are many options available and, again, researching the different providers and their offers can add up to long-term savings.
“When the health insurance premiums increased in April 2016 some providers increased by 3.76 per cent and others 8.95 per cent, so firstly look at insurers who passed on the smallest increases. Also re-evaluate what cover you and your family need. Do you use all the extras you are covered for?
“Like the Energy Made Easy website there are independent online comparison tools you can use to assess health insurance.
“Speaking with your friends and family is also a good way to gain knowledge on what deals they have secured.”
Amanda suggested the same thinking could be applied to any cost where there is competition for your business, including home loans.
Plan ahead and save
Amanda said while public transport is often cheaper than driving and parking your car, there are ways to save even more, whether you ride the bus, tram or train.
“It’s often cheaper to buy tickets as a pass instead of individually. Under the new South Australian public transport prices a 28-day pass is $121.80, compared to if you bought 28 individual passes at $5.30, which equates to $148.80,” she said.
Amanda said planning could also see you save on food, petrol and holidays.
“With almost every purchase you make, there are ways to make your dollars go further,” she said.
“When you go food shopping, consider buying in bulk to get a cheaper price, and use the unit price to help find the best deal – that’s the bit on the label which tells you how much something costs per 100 grams. It makes comparing products much easier.
“Something I think most drivers do is try to align buying fuel with petrol price cycles so you’re filling up at the cheapest price.”
Avoid high cost credit and rentals
Individuals or families are under financial stress often look to payday lenders or rent-to-buy schemes thinking it will ease the pressure.
“Payday lenders and rent-to-buy schemes aren’t a quick way out. In fact they can cost so much that people end up having to take out another loan, or cut back in other areas, just to get by,” Amanda said.
“In 2015, there were almost 1,000 no interest loans written in South Australia totalling more than $850,000, with the most popular usage being car repairs, furniture, household appliances and white-goods,” she said.
“Our Good Money store in Salisbury offers these loans, and they’re also offered through community organisations across the state. So wherever you live, there’s likely to be a NILS and StepUP provider nearby.”
Good Money offers safe and affordable financial services for people on low incomes in Salisbury South Australia. Good Money is an initiative of Good Shepherd Microfinance and NAB, and is supported by the South Australian Government.
For more information on the No Interest Loan Scheme (NILS) or the StepUP low interest loan, head to www.goodloans.org.au.