Inflation has been at its highest growth rate for the past two decades and the government only expects this to rise by the end of the calendar year.

For university students this can be particularly concerning. High inflation raises the costs of student necessities such as food, housing, and transportation, which are all essential in maintaining a healthy school life.

Connor Maturen, a second-year student at La Trobe University says that he’s had to make some changes due to the price increases.

“I noticed when I did my usual shop that I needed to cut out some things. I’d look at my receipt afterwards and think, ‘I can’t keep buying some of this stuff’,” he tells upstart.

Inflation can make it difficult for many people to meet their financial obligations right now. So, what can students do to better understand inflation and make sure it doesn’t hit them too hard?

Understanding inflation

First, you need to understand what inflation  is, and why it impacts the cost of living.

Inflation is the keyword here, so what is it? By definition, it’s a persistent yet gentle rise in the cost of living over a certain amount of time.

For example, if someone were to buy a hotdog for $1 and the price increases by 50 cents compared to a year earlier, the hotdog’s inflation is 50 percent.

At the same time inflation goes up, the buyer’s purchasing power decreases, meaning a dollar purchases less and less.

With inflation, now is a great time to develop some saving habits. Whether inflation goes up or down, it’s always a good idea to find ways to optimise savings. So, if you’re in a pinch, here are some simple tips to cut back costs in your daily life.

Save—and split your money into different accounts

Many people assume they only need one savings account to meet their needs, but that isn’t always the case. Having a number of accounts – at the same bank or a different bank – can be helpful in budgeting and managing different savings goals.

Financial counsellor at La Trobe University, Lil Kennedy says that having multiple accounts can help separate spending money from savings.

“Basically, the idea of splitting up your accounts is to better manage your finances. You have one account that you put into for bills, you have one that you use for savings, and then you have your money in another one which is used for personal spending,” she tells upstart.

Whether you use one or many bank accounts, knowing how your money flows is an important first step into better managing your finances.

Rethink the food you buy

The latest inflation numbers from Australia’s Consumer Price Index confirms that grocery prices have gone up 5.9 percent, petrol 4.2 percent and rent 12 percent from last year.

Study Australia has found that students living away from home spend an average of $140 to $280 on groceries and eating out weekly. When it comes to groceries, there are plenty of budget friendly options that can give you great meals.

Kennedy says the first thing to lookout for is food that’s in season. This is because when produce is in season it’s at its peak in supply, and costs less for companies to harvest and transport to a grocery store. If the fruit or vegetable you’re looking for isn’t in season it will often go up in price.

“Fruits and vegetables are quite expensive at the moment. Buying these foods while they’re in season or slightly off can help save you some extra money,” she says.

Frozen, dried or canned foods are also great alternative ways to save money, and they still provide the same nutrients. These foods also last longer as they can be stored for weeks or months without spoiling.

Grocery lists can also be a major money saver. The Journal of Consumer Behaviour found that by taking a shopping list along with you to the store you can reduce expenses by 25-30 percent.

Find other ways to reduce your expenses

Occasionally checking in and analysing your finances is important to do, especially now.

One place to start is by analysing your mobile bill. We initially always try to find the best price when purchasing something like a phone plan, but as time passes the prices can go up. A way to cancel out some of the increase in expenses is by taking a closer look at your bills and cutting down what isn’t needed, then trying to negotiate or reduce the rest.

One way to do this is comparing different providers to make sure it’s the best deal out there. Kennedy says that while it may seem obvious, you can save some money through something as simple as comparing different mobile providers.

“Assessing different mobile plans can save you a bit of money,” she says. “Knowing what plan you need, like how much data and phone time can all save you in the end.”

Another way to reduce expenses is by using student discounts whenever they’re available. Student discounts are offered on things like public transport, tickets to movies, events, and even car registration.

Financial support 

If you’re still finding it hard to manage your finances, there are a number of free resources and services that may be able to help you.

Websites like Moneysmart or The National Debt Helpline are for anyone, and they offer free financial counselling to help people manage their budgets.

Kennedy says there is even financial counselling offered at universities, such as La Trobe, that aims to provide accessible help to students who are struggling.

“The whole idea of what we’re trying to do is to help set up some good practices for the future.”

With inflation being at an all-time high, budgeting can be a challenge, and it can be especially frustrating when there is seemingly no end in sight. Learning how to optimise your savings now can better help you prepare for the future.

Article | Chloe Ostler is a third-year Bachelor of Media and Communications (Journalism) student at La Trobe University. You can follow her on Twitter @chloeostler.

Photo | Australian Coins and Notes Macro by Martin Howard available HERE is used under a Creative Commons License. The photo has not been modified.