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3 ways to fight inflation, without cutting back

A composite image of people standing at various ATMs and Australian money.
Rising inflation means the cost of living is surging, and these price increases have become challenging for many. (Source: Getty)

Inflation has us all inspired to fix our finances.

So just what are what I call the top win-spired ways of doing this?

Not the hard ones… the ones that simply, smartly make your money go further… by working the system instead of working harder.

Read more from Nicole Pedersen-McKinnon:

Here are the top three ways to fight inflation, without having to cut back.

Win-spiration 1: Your mortgage most likely consumes the biggest slice of your salary

It might be worth noting that if this slice grows to become more than one-third of your salary, it’s considered you have fallen into housing stress (the same applies if it is rent).

With seven rate rises so far, and six more rate hikes forecast by money markets before rates begin to fall in the middle of next year, coping is a challenge.

But if you’ve had your mortgage more than two years, there are a few things you can do.

There is a behind-closed-doors rate war going on as banks scramble to keep customers.

In fact, think now of a lender’s advertised interest as a fake rate. Particularly if they are large.

Indeed, you could probably entirely wind back the repayment clock to where it was five months ago.

Your strategy is three-part.

1. Call up your lender immediately and ask for a discount. Add weight to your request by saying you know there are quality mortgages with real offset accounts as cheap as 3.59 per cent (give it a Google).

But if they fail to offer you a better deal, move to step two.

2. Identify a better deal and make official noises about a ditch and switch. You do this by contacting your existing lender’s ‘mortgage discharge’ department. Mortgage brokers are telling me that lenders are so desperate to keep your custom, that they are matching crazy-cheap deals. They’d rather lose out than lose you. The hope is that their ‘mortgage retention team’ will swing into action.

But if they fail to offer you a better deal, move to the step three.

3. Go through with the refinance. In this case, lenders are competing so fiercely for new business, that on top of a bargain rate, you may well get a cashback of as much as $5,000. The difference between even the advertised discounted Big 4 rate and the most competitive, comparable products on the market has blown out to 161 basis points. That’s almost the hike in rates to date.

An instant discount is on the cards in a win-spired mortgage move.

Win-spiration 2: Compare all your other payments

It's not just your mortgage where you’re likely on a sub-optimal deal, everything from your mobile phone plan to your insurance policies could be costing you over-the-odds.

Jump on a comparison website and price-check your life. Of course, you want like-for-like rather than cheap and cheerful.

You also need to do just a little bit of legwork to figure out how to disable the comparator’s ‘bias button’: the mechanism by which it displays products for which their ‘partners’ pay rather than those for which you will pay less.

There may be no escaping the electricity and energy price increases – there, your consumption is your ticket to regaining control – but you can probably save on all your other so-called fixed cost.

Comparison sites to immediately see your potential savings include Canstar, Finder, Mozo and RateCity.

Win-spiration 3: Finesse your health fund

You might not expect this one, but the thing is, there may be money just lying in it for you.

As opposed to dropping health cover due to the expense, which has also gone up by 2.7 per cent on average this year, work it properly.

Few people know that if you have small children, many funds let you claim up to $200 per child per year for swimming lessons.

And if you are a little injured and can get a GP to sign off that it is medically necessary, you could claim the same $200 per person for gym membership.

You could also get rehabilitative exercise physiology and group physiotherapy sessions at a reduced cost.

Don’t forget dental cleans and checks are heavily subsidised for all family members.

Just make sure you are not paying too much for private health in the first place. Check out the excellent and independent to compare policies to see if you can make instant savings there too.

The chances are you could get the same cover at reduced cost. And you shouldn’t need to re-serve any hospital waiting periods either.

In this epic inflation fight, how much money could you ‘win’ back?

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at Follow Nicole on Facebook, Twitter and Instagram.

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