Cost of living increases and your finances
Soaring power costs, rising petrol prices, climbing rents and surging interest rates…
These are just some of the cost of living increases impacting household finances and business bottom lines across the country.
Regardless of your income or the industry your business serves, a spike in inflation to the highest level in 20 years will change the state of play for your finances.
At North Advisory, we provide accounting services and financial advice to individuals seeking a tailored strategy to wealth management and businesses on the trajectory of dynamic growth.
So how can you and your business make it through this challenging time?
We discuss a few key ideas below.
“Rising living costs don’t just affect day-to-day spending — they reshape long-term financial decisions.”
Cost pressures and business operations
According to recently released Australian Bureau of Statistics (ABS) data, more than a third of businesses expect to increase the prices of their goods and services over the next quarter to cushion themselves from the impacts of inflation.
ABS Head of Industry Statistics John Shepherd said, “Most of these businesses were finding that increases in the cost of products and services (92 per cent) and fuel and/or energy costs (78 per cent) were leading factors for planned price increases.”
The report showed that professional services businesses expect business overheads to increase by around 50% in the next quarter with staff costs also driving upwards by about 38%.
Are these projections in line with your own business plans?
For assistance to make these projections, contact our business accounting specialists today.
Coping with increasing costs in business
How can your business best cope with increasing overheads as inflation continues to impact the economy? Here are five steps every business can take to mitigate the impact.
1. Invest in a good accountant
At North Advisory, our business accounting specialists work with businesses at every stage of their lifecycle, from the start-up phase and growth phase to established businesses looking for uniquely tailored solutions.
Every business has its own unique set of accounting needs and there’s no such thing as one size fits all when it comes to financial management within an established organisation.
This is why it’s critical that you partner with expert business accounting professionals who take the time to truly understand your requirements.
Our experienced team of Chartered Accountants delivers tailored, end-to-end corporate financial solutions and understands the meaning of service.
During times of rising external pressures, the assistance of a good accountant can ensure you avoid costly financial mistakes and can help you to identify cost-saving measures and tax-effective strategies.
If your business is seeking the engagement of an informed financial partner, contact us for more information about how we can help you to:
- Optimise your systems
- Protect your assets and wealth
- Grow your business now and into the future.
2. Find more cost-effective ways to operate
Rising rental costs combined with increasing costs of electricity and other utilities create the perfect storm for businesses operating multiple commercial locations or offices in high-rent localities.
To reduce the cost of this major overhead, consider if some of your staff can work from home – reducing the costs of operation and potentially even the number of office-based locations you need to operate.
Alternatively, changing the way your employees work may allow you to free up some space within your existing offices to rent out to other businesses needing smaller spaces.
3. Reduce your staff costs
Employee wages make up a large portion of overheads for most businesses.
If it is possible to reduce your staff numbers without reducing your productivity, this could be an option to reduce overall business costs.
Alternatively, instead of hiring new staff to fill in gaps, training your existing staff could be an option and could also allow your trusted employees the opportunity to increase their knowledge and skills.
Outsourcing certain roles or portions of roles is also an option to avoid the costs of employee headcounts but still get the work done.
Unsure how to best manage your business operations?
Contact North Advisory and inquire about our business operations and CFO services.
Our quality financial reporting, astute strategic recommendations and true commitment to your progress are what make us your ideal partner.
Ask us more today.
4. Consider marketing opportunities
Marketing is a necessary part of keeping business momentum going, but it doesn’t always have to be an expensive exercise.
During periods of cost-cutting, consider how you can leverage your best marketing tool – your loyal and happy customers.
Consider how you could make your return customers ambassadors for your business to help build your business during tough times.
Encourage your happy customers to become company ambassadors by providing them with incentives and discounts on their existing services.
5. Review your contracts
This is something your accountant or lawyer can usually help you with, and is a great way to cut costs during difficult financial times.
Review the contracts you have entered into with your own services providers, from utility services right up to other professional services you utilise to keep your business running.
Can you negotiate a better deal?
Cancel any contracts that no longer serve your needs and get the most favourable deals possible for the ones you keep in place.
“A clear financial plan can help you stay in control, even when costs keep climbing.”
Rising costs and your personal wealth
According to the Australian Bureau of Statistics, inflation has risen by 1.8% in the September quarter to reach 7.3% in the past year – the highest increase since 1990.
It’s official – it costs more to live right now and we are all paying more for food, housing, transportation, healthcare and utilities.
As a result, many businesses are also feeling the pinch and increasing the costs of their goods and services.
So how can you not only maintain your standard of living during times of high inflation but continue to build your financial security into the future?
At North Advisory, we understand and value your life goals and we know the importance of feeling confident about your financial position.
Our wealth management services can assist you at any stage of your personal journey, whether you are in the wealth accumulation phase, securing your future or funding your retirement.
Ask us today how we can help you achieve positive outcomes with our tailored personal wealth management advisory services.
Personal tips to cope with living cost increases
There are some things you can do today on a personal level to cope with the rising cost of living. Here are our top five tips to safeguard your personal finances during this period of inflation.
1. Track your spending
Now is probably not the time to sign up for that new streaming service or take up a new activity.
Sit down and go through your bank statements and figure out where your money is going, first and foremost.
What can you trim from the edges?
What are you paying for that you aren’t using? (Gym membership, we’re looking at you…)
Make the easy reductions first, cancelling subscriptions that no longer serve you and renegotiating the costs of your insurance and utility provider bills.
Seek out those who are offering a first-time discount and incentives.
2. Reduce your energy consumption
Heat or cool the human, not the home.
This is the top advice for those looking to reduce their energy expenditure as electricity costs soar the world over.
Electric blankets and hot water bottles or fans and air purifiers are great ways to make your home more comfortable without turning up the heat or air conditioning.
Book an ‘earth day’ for your family and friends once a week where you eat dinner by candlelight and turn off unnecessary gadgets overnight.
Also, don’t forget to compare energy plans and switch providers if you find a better deal.
3. Side hustle
There are inspirational stories everywhere about those people who used their commute to pursue a side hustle that turned out to be the next big thing.
Consider ways you can make extra money to supplement your income using your existing skills or interests.
4. Renegotiate your home loan
For many Australians, our mortgages are the biggest drain on our weekly wages.
Are you currently getting the best possible deal?
Review your mortgage documents and interest rate specifications and shop around to see if there’s anything better on the market.
5. Hire an accountant or financial advisor
If you aren’t sure if you’re doing the best thing for your finances, find an accountant or financial advisor who will partner with you today so that you can be excited about the future.
At North Advisory, we can help you to make sure your money is working well for you.
Trust the experts
At North Advisory, our team has the skills and experience to guide you through the options you have to thrive personally and within your business.
Our team is ready to talk to you about your business accounting needs and your personal wealth management strategy.
We look forward to providing you with a flexible, highly tailored and truly personalised experience.
Contact us to find out more today.
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
Cost of Living Pressures Are Widespread
Rising expenses are affecting most households, regardless of income level.
Cash Flow Awareness Is Critical
Understanding where your money goes is essential for managing higher everyday costs.
Short-Term Adjustments Can Protect Long-Term Goals
Small changes to spending or debt management can help preserve savings and investments.
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Frequently Asked Questions
What is driving the current cost of living increases?
Cost of living pressures are being driven by factors such as inflation, higher interest rates, rising housing costs, increased energy prices and more expensive groceries and services.
How do cost of living increases affect households?
Higher living costs can reduce disposable income, strain cash flow and make it harder to save, invest or pay down debt.
Are cost of living increases temporary?
Some pressures may ease over time, but others — like housing and essential services — can remain elevated, making long-term planning important.
How can households manage rising living costs?
Strategies include reviewing budgets, prioritising essential expenses, managing debt effectively and adjusting financial goals where necessary.
Should I change my financial strategy because of rising costs?
Rather than reacting impulsively, it’s important to review your strategy and make considered adjustments that align with your long-term goals.
How can you protect your finances when the cost of living keeps rising?
The best approach is to review your cash flow, spending habits, and savings plan, then make small strategic changes that reduce pressure now while still supporting your long-term goals. A financial advisor can also help you adjust your budget, debt strategy, and investment plan so you stay on track despite rising everyday expenses.
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