Diana Clement: Extreme cost saving can counter inflation

As the cooler months arrive, think about putting on a jumper or a blanket before you opt to put the heating on. Photo / 123RF

OPINION:

Inflation is upon us, and few cannot have noticed the cost-of-living skyrocketing. Some price rises can't be avoided, but there are an awful lot of ways to make extreme cost savings.

It's a rare person who can't spend less. According to independent economist Tony Alexander's survey of our spending intentions for the next three to six months, a net 35 per cent plan to cut eating over the next three to six months, and a net 18 per cent will cut spending on clothing and shoes. Those are eye-opening percentages.

Extreme money-saving starts with ditching the confirmation bias. That's the well-documented tendency among humans to look for answers that support our argument. It's one of the reasons we convince ourselves that we "need" things that we just want.

Our biggest spending is usually housing, utilities, food and transport. Assuming that they can't be cut is wrong. Think "can" not "can't". Move in with others, rent out rooms, downsize, and so on. A relative of mine recently moved into a house bus, although that won't suit everyone.

Find excuses to cycle or walk, not drive, catch public transport, move closer or work from home.

Utilities can be reduced by switching off, being super mindful, putting jumpers on first before the heating, and taking radical steps such as showering at work, or studying in the library.

Kiwis can eat, quite well, on $50 a week per person. A recent discussion on the Kiwi First Home Buyers Group on Facebook brought out a whole number of members who did just that.

If I was saving for a home currently, I would have to have a long hard look at my grocery bill. Planning and cutting out non-essentials is how to do it.

Cycling or walking instead of taking the car will save you money. Photo / 123RF

Stick to your list, cut down on meat, and cook from scratch. Then analyse what are essentials. I had to tell myself that frozen passionfruit cubes are a sign of lifestyle inflation, not a necessity.

Overheard in New World Devonport last week was a young couple complaining about the cost of groceries: "How do ordinary people afford to eat?" they asked, while comparing what appeared to be the Yum brand organic granola at $14.99 for 350g and Brookfarm's 450g nutty granola for $15.99. The answer to that one is plain oats, in this case at $2.86kg, and, if you need it, dried coconut, honey, chia etc from cheap loose-bin stores.

True extreme food savings require that you compare not just individual prices but understand the big picture. One of the $50-a-weekers talked about how he doesn't eat potatoes and pasta as his main carbohydrate because rice is cheaper, saving him hundreds of dollars a year. He buys a 5kg sack at a time and eats for very little.

Beyond the food, extreme money-saving usually means not buying it, or if you really have to, buying it second hand, rather than looking for a "bargain" in the shops. The buy-nothing movement is big. Get started by choosing a period of time and buy nothing except absolute true essentials. After the month or year, you will have racked up sizeable savings, and most likely changed your spending patterns for good.

If you really need stuff, ask around. Your friends, neighbours or local community group probably has someone happy to divest themselves of said item. The Freecycle website is still a thing in New Zealand.

A group of young lads took the initiative on my local buy/sell group asking for items for their first flat. They came away with furniture, a washing machine that wouldn't fit someone's new renovation, and things like toasters, which were taking up space in someone else's home.

Finally, I do have to say that the CCCFA (Credit Contracts and Consumer Finance Act) debacle may have had a silver lining and helped some people navel-gaze on their spending. It could have lifelong benefits.