More Australians from all walks of life are running into financial crisis, according to the National Debt Hotline, as the ongoing cost-of-living crisis continues to bite.

Team leader and financial counsellor Karyn Hicks said when she started in the industry 10 years ago, she mostly saw people on low incomes and government support payments.

“We’re now seeing a different cohort of people, two-income families, and we’re starting to see quite a few retirees as well that are in financial hardship,” she told ABC Radio Adelaide.

“So certainly the demographic has changed and the impact of the cost of living and those interest rate rises are really impacting people at the moment.”

According to the Australian Bureau of Statistics, selected Living Cost Indexes rose by up to 6.2 per cent in the 12 months to the June quarter.

Food, insurance costs, financial services and housing were the main contributors, and followed rises of up to 9.6 per cent in the 12 months to the June quarter in 2023.

ABC Radio Adelaide has today asked experts for practical ways to save money and better negotiate Australia’s ongoing cost-of-living crisis.

Cents and Solutions: Home loans

Financial counsellor and author of The Barefoot Investor Scott Pape said if your home loan interest rates currently “started with a seven” it was time to get on the front foot and “shop around for a better deal”.

“If you’ve got a $450,000 mortgage, which is fairly low by today’s standards … a half a per cent reduction will save you $42,000 over a five-year loan, so it is well worth your time,” he said.

“I know all the talk at the moment is that interest rates are coming down and we’re waiting for the Reserve Bank to reduce interest rates, but I’ve been in this game long enough to know that a lot of experts get it wrong.”

He recommended people “stress tested” themselves with the federal government’s Money Smart website to prepare themselves for a worse case scenario.

“They’ve got calculators where you can work out your repayments … so [you can ask yourself] ‘if interest rates went up half a per cent, what would that do to my repayments?’ 

“At least then you’re putting yourself under stress before the bank or the Reserve Bank does.”

“Perhaps there should be law against banks, insurances etc increasing prices beyond what is reasonable with CPI. Life is too difficult and complicated when you have to remember to spend so much time continually monitoring and shopping around so you don’t get gouged. I think this sort of scenario is one of the reasons why our society is so stressed out.” — anonymous, ABC text line

Sally Tindall, data insights director at financial comparison website Canstar, said some banks were offering variable interest rates below 6 per cent, which would save people paying more than 7 per cent on a $600,000 loan about $12,000 in two years.

“Previously it was quite a lot of paperwork and quite a lot of time [to refinance with a different bank],” she said.

Ms Tindall said digital technology had sped up the process considerably, with some lenders offering applications in under 10 minutes.

“Even if you took two-to-four hours of paper work and little bit of running around … to save $12,000, I think, is a pretty good hourly rate,” she said.

Cents and solutions: Shopping

MyBudget chief marketing and people officer Danielle Puntureri advised people to have a weekly meal plan, so they were “really thinking” about what they purchased while grocery shopping.

“So things like trying to avoid impulse buying, really looking at the best ways to find the deals, shopping online, shopping at certain times of the week when you know that there’s discounts, looking at the end of the aisles where you’ve got two-for-one prices, or the 50 per cent off deals, buying in bulk.”

She said looking ahead to upcoming events like Christmas and looking for specials and opportunities in advance could also make a difference.

“All that means is that we’ve got to plan a little bit better to save in the long run,” Ms Puntureri said.

“It’s about some of those one percenters, smaller things you don’t necessarily think are going to make a difference but actually end up making a really big difference to your household budget.”

She added that bringing your lunch to work could end up saving you $50 a week.

“That’s about $2,500 a year. Who wouldn’t want that in their back pocket?”

ABC listeners also had some advice: 

“Always obtain receipts when grocery shopping and ensure ‘specials’ are put through at advertised prices. Last week’s discrepancies totalled nearly $20. When I returned 48 hours later and raised queries, retailer had to enter their system to change prices … ie, everyone who had purchased the goods paid full price — the soap powder going through at $18 instead of $12.” — Steph

Cents and solutions: Subscriptions

Mr Pape suggested people did some “doom scrolling” of their bank account online and look at what they were spending on.

This included subscriptions like television streaming services, for example, or other services they might be rarely using or had even forgotten about.

“Often times, people don’t look at their balance. They keep it in their head, so I’m suggesting that you look through your day-to-day bank account and see what you can cut,” Mr Pape said.

University of New South Wales consumer law associate professor Katharine Kemp has researched issues with free subscription trials and those that automatically renewed.

She said a survey by the Consumer Policy Research Centre found that more than 75 per cent of Australians had negative experiences while trying to cancel a subscription.

“Most of us have had that experience of the nasty surprise of noticing something that’s coming off your credit card when you may have forgotten or not realised that a so-called free subscription was going to turn into a regular payment,” Dr Kemp said.

“Keep an eye on your credit and debit cards to see if charges that you weren’t expecting show up there. Sometimes you can dispute them and you might have valid grounds to dispute them.

“And just as a practical matter, set a reminder alarm for the day before the first charge or the next charge to allow yourself that opportunity … to actually terminate the subscription if you don’t want to keep it.”

Ms Tindall said people should also check their iPhones or Android smartphone settings to see what subscriptions they were paying for regularly.

“You might find some in there that you had totally forgotten about,” she said.

Ms Tindall also suggested people printed out their bank or credit card statements, highlighted all their recurring expenses, and put an asterisk next to those that were “negotiable”.

They could then use it as a “to-do list” of financial payments to investigate either getting a better deal on, or cancelling.

Cents and solutions: Insurance

As a not-for-profit financial counsellor, Mr Pape said he had received a lot of questions about insurance, particularly health insurance.

“I think health insurance is a disgrace in this country. It is so complicated that it is incredibly hard to work out whether or not you’re getting value, and I think the private health insurers like it that way.”

He recommended people visited the government’s Private Health website to check for a better deal.

“You can actually put in that private health cover that you’ve got and compare, and you can save yourself hundreds, if not thousands, of dollars by doing that,” Mr Pape said.

He said costs for home and contents, and car, insurance were “going through the roof” and were a “lot higher than the rate of inflation”.

“In some cases, it was by 10 to 15 and 25 per cent [higher],” Mr Pape said.

He said when people received their insurance renewal notices, they should shop around and also ask, “if I’m a new customer, do you have any discounts?” as it could end up saving them up to 20 per cent.

“I changed car insurance providers and saved myself $20 a month as well as getting $100 cash back by moving my car insurance to my health insurance provider.” — anonymous, ABC text line

Uta Mihm is a health insurance expert with consumer organisation, Choice, and says all Australians should remember they already have health insurance through Medicare.

She said the only private cover she considers essential is ambulance cover because it is not publicly funded for people who live outside Queensland and Tasmania.

Just like with car and home insurance, she said it is worthwhile to consider switching health insurers because some offer free periods for new customers.

“Quite often in those promotions, waiting periods for extras, which might have a six-month waiting period, they are often waived,” Ms Mihm said.

“If you switch from the same level of hospital cover to exactly the same level, then all the procedures that you were covered for before are still covered.”

“Loyalty is not only NOT rewarded anymore but taken advantage of, if you expect loyalty from a business. We are punished if we don’t shop around every year now. So sad. I dislike the fact I now have to assume I will be ripped off if I don’t investigate every thing.” — anonymous, ABC text line

Sort My Money founder David Rankin said the idea of loyalty with insurance companies and banks no longer existed as a concept you were rewarded for and people needed to chase better deals.

He said people should put renewal dates for the likes of insurance policies in their diary so they know when they were coming up so they could investigate a better deal.

“If you can diarise car insurance, home insurance, it’s one job at a time … one job for that day, or the week before,” Mr Rankin said.

“It’s not overwhelming and it’s easy to do the research on one insurance policy [at at time].”

Cents and Solutions: Mobile phones

Tara Donnelly is the utilities editor for financial comparison website, Canstar Blue, and said a lot of people are paying more for phone contracts than they need to.

“A lot of us are using wi-fi data at home and work, so we may not necessarily need these massive data plans that are being marketed by the big telcos,” she said.

“For most people, 20 gigabytes is probably enough to get you through the month, assuming you’re not downloading movies or doing a lot of streaming away from your home wi-fi.”

She recommended that kids’ phones always be prepaid so parents don’t get surprise charges on the bills, and pointed out that most prepaid plans come with unlimited talk and text allowance.

If you already own a mobile phone, you could also sign up to a SIM-only plan, which means you are not paying off a phone as well.

“Most of the time, if you want a really good deal and you’re not looking for a new phone, then SIM-only is the way to go,” Ms Donnelly said.

She added that there are a host of SIM-plan resellers that used the major networks in Telstra, Optus and Vodafone, meaning people can branch out to find cheaper deals from smaller operators without necessarily losing coverage.

Ms Puntureri said she has found a better mobile phone plan through her grocery store. 

“I ended up saving $20 a month on my phone bill by switching … I got more data, and then I’ve got 10 per cent off my monthly shop once a month,” she said.

Cents and Solutions: Debt

Mr Pape said his number one tip for people having money problems is to understand that they are not alone. 

“It’s just a time of life we are living through right now with this economy, and you have more options than you think,” he said.

He recommended that people who need support contact the free not-for-profit National Debt Hotline on 1800 007 007.

“You can be put through to a financial counsellor who can sit down with you and go through your situation,” Mr Pape said.

“There is also a small-business debt helpline [1800 43 828] … for those who are struggling right now.”

Ms Puntureri said everybody has debt, and that is a reality. 

“Whether it’s your credit card, buy-now-pay-later loans, or your mortgage repayments, debt is actually not a dirty word,” she said.

She advised paying off credit cards as a priority because the interest rate is so high.

“Maybe even look at ways to stop using credit cards, or using them in a way that makes sense,” Ms Puntureri said.

“My biggest tip is to look for a better deal and think about that across all of the key expenses you have.

“It does take time, but trust me, you will save a lot of money in the end.”