With inflation at it’s highest level in decades and wages failing to keep up with it, managing the cost of living is a bigger challenge than ever. And while there is no magic wand to wave to fix this, there are some definitely steps that you can take to help lower the costs.
Negotiate with yourself
Before you even start looking at what others can do for you, it is worth considering what are the non-negotiables for you. Get clarity on what is important for you, and adds value or happiness to life. This may mean digging in a little to really understand the value.
For example, you may have a regular catch up with friends on Friday night for drinks at the pub and find that you are regularly spending $50 to $100 of your hard-earned dollars. You love this catch up and don’t want to give it up. Consider though what it is that you love so much. Is it the company, the atmosphere or the drinks? If it’s the company and the drinks, you could relocate to one of your homes where the drinks will be cheaper. If it’s the atmosphere and your friends, maybe you can switch to alternating alcoholic drinks with water to save costs.
Prepare to negotiate with others
It could be that there are others in your household who seem less concerned about managing the budget than you. Before tacking them with requests to cut expenses, gather your support.
For example, you may have three different streaming subscriptions and want to cut back to one – and you expect resistance. Don’t just go in asking to cancel two services. Do your sums so you can show the other person how much it costs for each service over a year (it sounds much scarier than $14.99 a month). Also, if you can, demonstrate how much (or how little) each service has been used so you can understand value rather than just price.
Ask about cash payments
These days, it seems that cash is no longer king. But for larger purchases, it can be worth asking for a discount for paying in cash, particularly if there is no card surcharge. On average, card surcharges are anything between 1% and 2%. On a big purchase, paying in cash and asking that the vendor discounts the price by the surcharge amount can add a significant saving. Doing your research about rates before you negotiate will put you on the front foot when asking for a discount.
Negotiate to get more
The other half of managing the budget is about bringing in more income. By following the employment market to understand what rates are in your industry, you will position yourself to ask for a raise if you discover you are at the lower end.
Unfortunately, employers are generally feeling the pinch too and more money in your wages may not be available. Think about what your employer can offer that doesn’t cost them much but ads value for you. For example, they may be able to use their buying power to source discounts on everyday items. If you work in a café for example, can they add items on to their order and sell them to you at cost price?
If you can't negotiate a better deal with your current employer, can you find a better paid job - or even a side hustle that will add to you income. Perhaps there are some items in your home that you no longer need and could be valuable to others.
Tough times seem to be ahead for the next couple of years as we work through the Covid recovery. We may all need to tighten our belts but with a little negotiation, it may be that you can tighten by a few less notches!