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Wages not meeting the cost of living - beat the squeeze

21 January 2020

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We hear a lot from economists about stagnating wage growth, the downward movement of inflation and interest rates and how those pressures affect us. The Reserve Bank of Australia reminds us regularly.

According to a 2019 Federal Government paper, The extent and causes of the wage growth slowdown in Australia, wage growth for men and women to November 2018 increased by an annual average of 2.1 percent for men and 2.8 percent for women. [2]

However, and this is where things get interesting, if we look back at the years from 2008 to 2013, wages for women “grew by an annual average of 4.3 percent and 4.5 percent for men.”

Looking at the wage growth percentages from 2013 to 2018, they’ve slowed for everyone since 2013.

Wage growth helps us measure economic growth for a long-term since it reflects the consumer's purchasing power in the economy as well as the level of living standards and, while the growth for women is slightly greater than for men now, growth overall has considerably reduced since 2013.

If you feel you’re struggling to keep up with the Consumer Price Index (CPI), wage growth slow-down could be a reason. (The CPI is an estimate of the price of a bunch of goods and services, including such things as food, alcohol, clothing, health and housing expenses, transport, etc.)

Ongoing natural disasters - continuing drought and devastating bush fires – will put various positive and negative pressures on the CPI, further affecting us and our economy.

Hunting around online for interesting ways to save money, a host of Facebook groups pop up – many of which harness the collective power of women homemakers. (According to Facebook data, 80 percent of people on the Internet are on Facebook. That’s a lot of potential.)

Queensland mother Paulene Christie began a Facebook Page in 2012 called ‘Slow Cooker Recipes 4 Families‘. Two years later she had over 200,000 members and was designing a web experience to cater to members’ needs, as well as publishing cookbooks. Her following has continued to grow.

A few tips from seasoned slow cookers

  • Slow cooking allows you to use cheaper cuts of meat. Brisket, for example, which is approximately $13 per kilo from Coles at present.
  • Never slow cook using frozen meat. Always defrost first.
  • Energy savings: it’s cheaper to run a slow cooker for eight hours than an oven for an hour. Of course, there are many variables to consider including the size and model of your slow cooker and size and efficiency of your wall oven but overall the stats are well in favour of your slow cooker being the cheaper way to cook. Energy provider Ergon Energy’s calculator lets you work out the costs of running various appliances.
  • Don't add too much water to recipes, if any. The slow cooker makes much of its own cooking juices due to condensation from the lid. Roasts, etc. can start with no liquid at all. For regular oven type recipes, you’re trying in the slow cooker, reduce the liquids added down by at least 1/3 when converting them to slow cooking.
  • You can now purchase a crockpot slow cooker with a twist: it can be controlled using Amazon Alexa. Using the voice assistant, you can set cooking times and heat settings, and ask it to check the status of your meal.



Helpful resources

There are other Facebook groups delivering useful tips, along with ways to reduce your bills and make money. They include Aldi Mums: a group which discusses “all Aldi products, catalogue specials, hacks, product reviews, and you can also buy, swap or sell your Aldi items.”

Mums Who Clean, created about two years ago by Karlie Suttie, has well over 165,000 members. Its activity is phenomenal. The day we looked there had been 219 posts (it was only 10.30 in the morning); 4387 posts in the past 30 days.

Oh So Busy Mum is another group with a large active community, and a spin off from here - for all of you who dread the idea of school lunch boxes - Lunch Box Ideas Australia shares member ideas and recipes.

Even though the cost of living may be rising, you can still budget while focusing on your own health and wellness.

Exercise for free

Try your local council or community noticeboards for leads on where to exercise and what you can do for free. If you’re in Sydney’s CBD, for example, there are outdoor exercise classes in the Domain. Various local areas have community gardening and bush regeneration programs on offer. Hiking, bushwalking and bird watching clubs offer social ways to get back to nature.

Want to exercise at home or in the park opposite, you can start with these 35 Best Workout Apps of 2019 – many of them are free. There are apps for destressing and meditation, weight and training trackers, step trackers, etc. You don’t need expensive gym memberships, although self-motivation remains important. Get a group of friends together for a session, it helps.

Helpful tips creating healthier finances

The “B” word is on everyone’s lips: create a budget, make it realistic, celebrate small wins along the way and stick to it. For more on budgeting.

Insurances

Have you considered income and life protection? Perhaps, you have an amount left on your mortgage, for example 250K, and you decide to take out an insurance policy for that amount which, in the event of your death, can be used to discharge the mortgage and leave the property unencumbered. (The premium on a smaller life insurance amount could be more manageable and reduce debts at death. Always check with a financial expert or lawyer before making any decisions.)

Superannuation

Many of us have our superannuation in a fund we know nothing about. It’s worth having a look at the super funds that perform well and compare funds.

Think about salary sacrifice or topping up your super to the maximum at the end of each financial year with a one-off payment. You may be able to get a tax benefit.

Get your super into one spot using find my super.

Running a business?

Catch up that paperwork that’s been put on the backburner, it will help identify profit/finance leaks and minimise loss. For example: if you’re dealing overseas and with currency conversions, professional advice on foreign exchange is advisable.

The information above is general in nature. Always seek professional assistance to ensure that your decisions are appropriate to your personal circumstances and objectives.

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