Inflation: how to deal with the rising cost of living in Australia
The rise in the cost of living in Australia has been a major issue facing families and individuals across the country. In recent years, Australians have seen increased prices for basic items such as food, housing, transportation, utilities, and education. The main contributing factors to this increase are a steady decline in wages over the past decade combined with rising inflation rates.
With wages not keeping up with inflation rates, households are unable to stretch their income any further and end up spending more than they earn each month. This is leading to increased levels of debt for many Australians who are struggling to cover all their monthly expenses.
Furthermore, taxes on everyday products have also gone up significantly since 2009 which puts an additional financial burden on consumers who already find it hard enough to make ends meet each month.
The soaring house prices in cities such as Sydney and Melbourne have been one of the major contributors to an increased cost of living as people look for more affordable places to live outside these expensive metro areas. Rising mortgage rates have also added to high home prices throughout Australia.
The price hikes on energy bills due to a combination of high levels of demand coupled with government deregulation measures have been another cause for rising living costs across the country. Public transport fees and petrol prices have also risen significantly over the last decade making it difficult for people to commute.
In addition to these factors, taxes levied on food items such as GST, excise duties on all types of alcohol and tobacco products plus health care funding levies charged by Federal and State Governments have made basic daily items increasingly more expensive for consumers across Australia.
How to deal with Inflation in Australia
There are several ways to deal with inflation in Australia.
1. Cut spending: I know, it seems obvious and easier said than done but unfortunately, this is one of the most effective ways to reduce the impact of inflation. Reducing your spending helps keep more money in your pocket, and can help you save for a rainy day.
2. Increase income: Increasing your income provides more money so that it does not get lost in rising prices and helps counterbalance inflationary pressures. Increasing income can be done by getting a raise at work, starting a side hustle, taking on a second job, or investing money into businesses or other sources of passive income.
3. Invest wisely: Investing wisely includes diversifying investments, hedging against currency fluctuations, buying foreign assets, and using debt strategies such as borrowing against future earnings to mitigate risks associated with inflation-linked bonds and securities markets in Australia.
4. Monitor Government Economic Policy: Governments may increase taxes and implement new regulations when attempting to control inflation levels; understanding how these policies affect consumers’ purchasing power is essential when dealing with Australian inflation rates over time.
5. Boost public sector investments: Increasing public sector investments in infrastructure projects such as roads, railways, airports, and ports will not only stimulate the economy but also help reduce unemployment levels