Increase your income
FROM SIDE HUSTLES TO CAR SWITCHING, HERE ARE SEVEN TIPS TO BOOST FINANCES WITHOUT A PAY RISE
Real wages have gone backwards this year, and will probably shrink again in 2023, but there are ways to boost household income and reduce stress without a pay rise from your boss.
Inflation in Australia is nearing 8 per cent and rising more than twice as fast as peoples’ pay packets, while employers – also facing sharp rises in costs – are unlikely to be able to offer big wage increases.
Financial wellbeing company Wagestream’s chief executive, Josh Vernon, says real wages – what you get paid after factoring in inflation – are at their lowest point in 11 years.
“Most experts think this trend won’t subside until mid to late 2023 … Inflation in Australia and globally is continuing to rise,” he says.
The challenge for consumers and workers is to boost household income through other means.
Fortunately, there are some options.
1 RESTRUCTURE DEBT
When your interest costs drop, your spare income climbs.
This can be achieved by refinancing, switching lenders, consolidating debt and targeting the right loans first.
“If you have multiple forms of debt, it can be helpful to create a list that prioritises debt from most expensive to least expensive,” Vernon says.
“Then you can focus on paying down the most expensive debt first.”
Consolidating debt such as higherinterest personal loans and credit cards into a lower-interest mortgage can also free up cash, but be aware that changing loan terms can eventually cost more in interest.
“Debt consolidation can mean just one regular repayment schedule, which gives you a clearer picture of when and how you might finally become debt free,” Vernon says.
2 LINE-BY-LINE CHECK
Sort My Money founder David Rankin says he often sees clients who have not recently checked their bank and credit card statements.
“They will be surprised by what is coming out of their account – things that maybe their kids have signed up for through a payment wallet, or something they signed up for a long time ago and thought it had been cancelled,” he says.
“On that first line-by-line run through, we always capture costs and eliminate them. It’s a quick way to get ahead.”
3 SIDE HUSTLES
It’s easy to earn money outside your main job through many side hustle apps, ranging from ride sharing and house sharing to storage and pet sitting.
“Airbnb is an obvious one,” Rankin says.
He has seen a surge in people starting hustles as carers for the National Disability Insurance Scheme, using platforms such as Mable.com.au to find work paying $50 an hour.
“All you need is a police check and first aid certificate – they’re earning really good money,” Rankin says.
4 DUAL-INCOME FAMILIES
Rankin is also seeing former single-income families become dualincome as living costs bite.
“A lot of couples now have no choice,” he says.
“It’s all hands on deck.”
5 SECOND CAR SWITCH
Some households are using their smaller, second cars as the main family vehicle amid soaring fuel costs. “It’s doing the heavy lifting because it’s so much cheaper to run,” Rankin says. “The definition of the main family car has changed.”
6 SAFETY NET
Having a financial safety net reduces stress, and some people use cash in the bank or a redraw facility on a mortgage.
Others are accessing cash through earned wage access, where employees can get a portion of their earned wage before payday. Vernon says Wagestream charges a flat $2.49 fee for this option regardless of the amount withdrawn and says employers often cover the cost.
“Knowing you can access this service at any point from an app on your phone can also create huge financial peace of mind,” he says.
7 MAKE IT AUTOMATIC
Micro savings platform Blossom’s co-founder, Gaby Rosenberg, says another stress buster is knowing where money goes and using apps to track and transfer it automatically.
“Budget your money to zero each month by assigning a purpose to every dollar of your salary, and then automating that budget,” she says.
“You could set up a variety of bank accounts for your different needs such as everyday spending, splurge money, debt pay down money and rainy day savings. Then set up automatic transfers into these accounts on your payday.”