Rebalancing your finances in the wake of Covid
One of the things that Covid has brought is escalated prices. I'm in Australia and the price of houses as gone up 22% in a lot of places, interests rates are at .1% but that means that we do not earn interest and a lot of people are taking out mortgages based on this low rate. Grocery and petrol prices are through the roof which means the cost of living has increased to a level where people are struggling and wondering what is going on. Sadly the fact is that the only thing that hasn't gone up is income wages. Inflation is set at about 11% where as wage increases are around 2-5%.
I have certainly noticed a huge impact on my own budget and have had to drastically adjust several things to balance it.
Budget adjustments for 2022
Groceries - My grocery budget used to be max $100 a fortnight. Now even $200 is often not enough. Realistically I could set it to $200 if I want to live on the basics but I enjoy going out with friends so realistically it's at $300 now. To give some idea of prices at the moment.
500g block of cheese used to be around $7, it is now $20
1kg tray of beef mince was $7, now $14
2 chicken breasts used to be $6, now $11
a loaf of bread was .90c now $3.10
So even buying the cheapest brands and not splurging my groceries have had to go up drastically.
Car - My old car just required too much maintenance to keep it running and things just kept breaking. I think when I traded it in it needed $4000 of work and was only worth that so I traded it in for a 4yr old i30. These are great little cars. Plenty of room for two of us and passengers if we need it. Heaps of boot space and a 5 star ANCAP (safety) rating. Its much more fuel efficient and an automatic which has been a god saver for the rising petrol prices. The interest rate on the loan for the car isn't the best but I am planning on paying it out within a year rather than over the 3yr loan term.
On that, petrol is now $2 per litre which mean by budget here went from $70 - $90 and I try to limit my interstate trips. My insurance on it was initially $100 a month which to me was much too high so I hunted around and found a much better rate with Budget Direct for just $40 instead.
House hold costs - Rent has stayed the same thankfully and I may be moving shortly for the same rent. Electricity prices have gone up but as my home is fairly new and small it is easy to heat and cool. thankfully also it has been a very mild summer and winter so we haven't had to use the heating/ cooling too much.
Work - I am back at work which means more petrol is being used as well as having parking costs again. This is $15 a day for parking, thankfully I can still work from home some days so this is around $80 a fortnight plus the additional petrol of about +$30 a fortnight. My style has changed a lot since the last time I was at work so I have had to purchase some new work wear. My work is casual corporate so nothing too fancy but some sensible shirts and pants were needed. Unfortunately the charity shops in my area aren't great and can be just as expensive as going to a regular store. I will cover more on clothing in another post as I have some tricks to keeping that budget down.
