How to Deal With the Rising Cost of Living Without Feeling Like You’re Constantly Cutting Back

The rising cost of living is coming up in conversations everywhere at the moment.

Interest rates have risen again. Household bills are higher. And among the business owners I speak to, there’s definitely a feeling that money isn’t flowing quite as easily as it once did.

It’s understandable that the natural reaction is: Where can I cut back?

But I’d like to suggest a slightly different question: How can I get better at using the money I already have?

It might sound like a small distinction, but I think it matters.

Constantly telling yourself you need to save, spend less or stop buying things can make managing money feel restrictive.

Instead, I prefer to look for smarter ways of doing what I already want to do and make that my normal "steady state". Not a reaction to external prices or government policies.

My ultimate goal is to build a financial life that is as resilient as possible to whatever happens in the outside financial world. This is something I started doing years ago (and was dialed up during the COVID years).

Here are some places to start to help you get there (if you aren't already).

Look differently at what you buy

Recently, my daughter needed new roller skates because she had outgrown hers.

We could have bought a new pair. Instead, we looked on Facebook Marketplace and found a pair that had originally cost around $300 for $60 (and they were basically brand new).

She used the rest of her birthday money to buy them herself.

There were a few wins here: she got a much better pair of skates than we might otherwise have bought. She felt proud because she paid for them herself. And something somebody else no longer needed got another life.

That doesn’t feel like deprivation. It actually feels pretty good.

Before automatically buying something new, ask whether there might be a better way to get what you want.

Get smarter about groceries

Food is one of the biggest areas where small differences can add up.

I like good-quality food and prefer organic or spray-free produce where possible, so simply buying the cheapest food available isn’t a solution that works for me.

Instead, I shop differently.

I use places such as Costco and Aldi for products where they offer good quality and value. I buy some ingredients in bulk. I buy spray-free produce directly from farmers. I make my own sourdough bread and quite a few of the snacks and meals that go into my daughter’s lunchbox.

None of those things individually transforms our finances. But repeated week after week, the savings add up.

You don’t necessarily need one enormous money-saving decision. You can make lots of small decisions that become normal.

Review the cost of your debt

This is one area I would not leave entirely to DIY.

If you have a mortgage, investment loans, credit cards or other debt, get them reviewed.

A good mortgage broker should be checking whether your interest rate is still competitive and whether there are better options available.

For business owners, I would also include ATO debt in this conversation.

Ignoring ATO debt rarely makes it better.

Talk to your accountant about your options, including whether a payment plan is appropriate. If you’re doing quarterly reporting and constantly discovering problems months after they occurred, it may even be worth looking at whether monthly reporting (including submitting your BAS monthly) would give you better visibility.

The goal is not simply to reduce this month’s payment, it’s to have a plan.

Look at transport differently

Another area where we’ve changed our habits is transport.

I cycle locally when I can. We use public transport. My daughter and I sometimes cycle to the train station rather than driving.

I also use Petrol Spy to compare fuel prices around me before filling up.

And I carpool to some business events with a business friend who lives nearby.

Again, none of this feels particularly restrictive.

In fact, carpooling means I get uninterrupted time to chat with someone I like. Taking the train into the city with my daughter can become an outing rather than another drive through traffic. Plus, I can be completely present with this time I spend with her (rather than focused on driving).

Saving money doesn’t always have to mean getting less. Sometimes you simply do things differently, and think about why you're doing them in a different way.

Stop automatically accepting price increases

Every year, I review our insurance. Quite often, simply contacting the insurer and asking what they can do produces a discount.

Do the same with electricity and other regular household expenses.

We have more help available with this than ever before because AI can now do a lot of the initial research legwork.

You can upload an electricity bill or insurance renewal and ask an AI tool to help you understand what you’re paying, what you should compare and what questions to ask your existing provider. They can even potentially find you a better deal.

You can even use it to help reduce food waste.

Take stock of what’s in your pantry, fridge and freezer and ask AI to create a meal plan using what you already have.

That saves money, reduces waste and, possibly best of all, means you don’t have to decide what to make for dinner.

One important caveat: AI is a useful research assistant, but it isn't a substitute for professional financial advice.

When you’re making decisions about mortgages, debt, tax or financial products, there are nuances that require skilled human judgement.

The real goal isn’t to become good at “cutting back”

There’s a bigger reason I do all of this.

I don’t want my financial wellbeing to be completely dictated by interest rates, inflation or the latest economic cycle.

Of course we can’t insulate ourselves from everything, but we can create more breathing room.

And there is a big difference between walking around thinking:

“I can’t afford that.”

and thinking:

“Is there a smarter way I could do this?”

One feels like scarcity. The other gives you agency.

The aim isn’t to spend your life hunting for discounts or depriving yourself of the things you enjoy.

It’s to build simple habits around money that become so normal you barely think about them.

Because the best cost-of-living strategy, in my view, is one you can continue using long after the latest cost-of-living crisis has passed.