The cost of living is going up.  However, don’t get caught up in all the doom and gloom - take a step back and put everything into perspective. 

The cost of living is going up.  However, don’t get caught up in all the doom and gloom - take a step back and put everything into perspective. 

Food:  You don’t have to eat highly processed or takeaway food.  There is plenty of good value, fresh tucker available in season.  In major population centres, healthy produce is actually very competitively priced.  Of course, the pick of the imported, non-seasonal product may be high in price but it is not a necessity.

Fuel:  On average the price of fuel has risen 25 to 30 cents per litre.  Let us say you use 50 litres of fuel per week.  At 30 cents, that is $15.00 per week extra you will have to find.  In light of this figure, you can’t really justify spending thousands on a more fuel-efficient vehicle.

House deposit:  If you are saving for a house deposit, it is obvious in the current economic climate that saving for that nest egg is going to be more difficult.  For this reason, it is important to understand your budget and make sure that you adopt the most sensible strategies to maximise your cash flow.  Ask yourself:  Do you have your salary packaged in the most effective way?  Are you taking advantage of the Government co-contribution for superannuation or the new, soon to be available First Home Saver Accounts?  Are you paying more tax than you need to?  Is your family protection insurance package arranged in the best way for your situation?

Don’t get down in the dumps next time you pick up the newspaper, flick on the news or tune in the radio and hear about the rising cost of living.  Instead, take control.  Start with your budget then make sure you are using the smartest strategies for your situation.  From here on, sit back and watch the cents turn into dollars. 

Peter Lake is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 (AMPFP), AFS Licence No. 232706. Any advice contained in this document is of a general nature only and does not constitute personal financial product advice. In preparing the advice no account was taken of the objectives, financial situation or needs of any particular person. Therefore, before making any decision, readers should consider the appropriateness of the advice with regard to their particular objectives, financial situation and needs.