Innovate to save hip pocket pain: finance guru

What can people do to protect themselves from more hip pocket pain?

"A real challenge facing younger adults who haven't been taught or haven't had exposure [is saving]. That's something that's going to be forced upon them in an environment where you'll see increased mortgages, increasing interest repayments, and also increased rents because the investment property owners will pass that increase they're paying interest on to the tenant."

What is the impact on small businesses?

"The other issue that is of concern is that around six to seven million Australians are either employed by, or are employers in a small business. They haven't financially recovered from the pandemic in many cases, particularly those that have been in events and hospitality. Small business owners need to be very careful about their expenses in this environment as well.

"It won't be good news for restaurants, because the first thing that people will cut back on is generally eating out. The second thing will be travel, and the third thing is clothing and footwear."

How do families start a plan to save?

"The first thing that we're saying to our clients is that you have to look at what your absolutely essential fixed expenses are. That is related to accommodation, which means it is your rent or your mortgage, and your cost of getting to and from work.

"You've obviously got to feed the family, and got to eat, so have a look at your credit card and what you've previously spent on groceries.

"Then we look at sort of other things that you might not need in your budget that you're going to have to cut back on. The first thing is generally... streaming subscriptions. People have gotten so lazy with just paying $6 or $30 or $21 a month for all the different channels that they watch on TV."

Should families find innovative ways to save money?

"Can you do a gym workout, or workout from home, or go for a run around the block, rather than being a member of a gym? Do you still have to be a member of your local footy club or AFL or NRL team? Can you change your plan with that club?

"The other thing that a lot of people have done, which really came out of pivoting in the pandemic, is they've had a side hustle. Whilst people have got their main source of income, you then need to figure it out, with the time that you've got up your sleeve... is there a way that I can earn extra income in this interest rate environment? For example, decluttering your house, selling some of your clothes on eBay, [Facebook] Marketplace or wherever you can make a few extra dollars."

Shopping for deals?

"One thing that has been positive, which hasn't been positive for shareholders, is that about two weeks ago... it was announced that Woolworths were going to put a freeze on 300 staples. Their share price has fallen significantly on the back of that. But from a customer's point of view, they're trying to show loyalty and to make sure that they care about the customer. It's interesting that one business has put the Australian people over shareholders which is certainly an unusual decision by the board, but that is a plus."

"The more expensive products that aren't on special, people simply won't buy. You'll find that the average Australian will start to hunt for deals or only buy products that are discounted or on special at that point in time. That's what happens when money gets very tight."

You encourage people to become aware of their own financial situation

Scott Haywood: "People need to try to spend the time to understand what money they have, and where that money goes.

"No matter what income you do have, or what benefits you are on, you have to understand what comes in and where that goes out.

"Unfortunately financial literacy is not a compulsory subject [at school], and most people don't understand money, and avoid [dealing with] tax or superannuation.

"People on benefits, which isn't in line with inflation, it's very difficult for them. Most of them are probably renting or in commission homes - if they can even get into them, because there's not enough of them for the amount of people that need it. My only advice to them is at least spend the time understanding whatever money you have that comes in, where it goes out."