Your Budget And Rising Petrol Prices
Below is a MRR and PLR article in category Finance -> subcategory Other.
Your Budget and Rising Petrol Prices
Introduction
Navigating the rising cost of petrol can be challenging, especially if you're managing a mortgage. As petrol prices climb, you're not alone if you're feeling the strain. Many Australians may soon face the difficult task of covering bills while maintaining a decent standard of living for their families.
Understanding the Impact
In recent months, oil prices have surged to $65 a barrel, pushing petrol above $1.30 per litre. This spike, attributed to hurricanes in the Gulf of Mexico disrupting production, has already started impacting Australian family budgets. According to a BRW report, McDonald's CEO Peter Bush noted a 5% drop in sales growth, linking it to customers cutting back to afford the extra $30 to $40 a week for petrol. A related NRMA survey found that 25% of NSW and ACT motorists have reduced spending on food and groceries due to the petrol hike.
The Ripple Effect
Petrol price increases have soared 30% this year, making it a significant expense for many families. Dr. Abbas Valadkhani from the University of Newcastle highlighted that even minimal petrol use can affect individuals due to rising costs. The ripple effects extend beyond direct expenses. Industries like transport, agriculture, and dairy will likely pass increased costs onto consumers.
Hope on the Horizon
Experts believe this spike is temporary, driven by reduced production following natural disasters. As repairs progress and supply normalizes, prices should decrease?"possibly within six months to a year. Until then, expenses persist, including bills, Christmas budgeting, and mortgage payments.
Maximizing Your Mortgage
Now might be an ideal time to leverage your mortgage to mitigate these temporary costs. With low interest rates, using your mortgage strategically can help you maintain your lifestyle. Consider the following:
- Redraw Facility: Switch to a mortgage with a redraw facility to access extra payments you've made when needed.
- Refinancing: Consolidate debts like car payments and credit cards into your home loan. This can reduce your regular repayments, providing more cash to manage increased expenses.
- Mortgage Offset: Use this feature to minimize interest while keeping extra cash accessible. For instance, if you refinance with $10,000 in an offset account against a $100,000 loan, interest is calculated on $90,000.
Conclusion
While the current petrol crisis is temporary, it's essential to navigate these challenging times wisely. Your mortgage might just hold the key to easing short-term financial burdens, ensuring you can care for yourself and your family until the situation stabilizes.
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