Creating a Realistic Budget in a High-Inflation Environment

By Luke Volker, Partner and Senior Financial Advisor, Scone

I’ve been helping Australian families with their money for over 10 years, and right now—November 2025— almost every client I see is feeling the same squeeze. The September quarter CPI came in at 3.2%, and the RBA is holding the cash rate at 3.60% with no cuts in sight. Groceries are up 4.8% year-on-year, electricity bills jumped 14.2% in the last 12 months for many households, and if you’re on a variable mortgage, your repayments have probably risen by $1,200–$1,800 a month since the first hike in 2022.

I’m not going to sugar-coat it: if you don’t have a budget that you actually look at every month, you’re flying blind. Here’s exactly what I’m telling client’s right now:

First, do the mortgage autopsy

Open your internet banking. Look at the last three months of repayments. Then pull up your loan statement from 3 years ago and compare. I had a client whose variable rate had crept from 2.69% to 6.84%.

What I do next:

• Contact your mortgage broker to compare the market. Is your rate competitive. Are you in the right product?
• Is refinancing a viable option: even dropping 0.5% saves $250 a month on a $600,000 loan.

Second, build a proper buffer

I advise run at least three months’ expenses in an offset or high-interest saver. Right now the best offset accounts are paying 4.75–5.10%. That’s free money and instant access.

Here’s my rule:

• Take your new mortgage repayment after any refinance
• Add rates, insurance, groceries, fuel, school fees
• Multiply by 3
• That number sits in offset.

If you’re thinking “I can’t afford to save that,” you definitely can’t afford NOT to.

Third, slash discretionary spending—ruthlessly

Print their last 90 days of transactions and we go line by line with a red pen. Here’s just a few areas where savings can often be easily achieved:

• Afterpay/Zip
• Deleted subscription apps
• Uber Eats → meal-plan
• Streaming – Do you need every streaming option – consolidate

My favourite trick: Want something over $100 that isn’t a need? Wait a fortnight and ask yourself again, “Do I still want this?” Without the impulse to transact, 90% of items never make it to purchase.

Finally, the part most people hate: weekly/monthly budget reviews

No excuses. Set a recurring calendar invite. Open the budgeting app, categorise anything uncategorised, check the mortgage offset balance, and answer three questions:

1. Did we stick to the plan this week?
2. Where did we overspend and why?
3. What are we moving to the buffer or mortgage this week?

If you skip this, the budget dies. I’ve seen it a thousand times. But the clients who treat it like brushing their teeth? They’re the ones paying off 30-year mortgages in 12 years, building six-figure offsets, and sleeping through rate rises.

My promise to you

If you do these four things—review your mortgage this week, build a three-month buffer, cut the low-hanging discretionary fruit, and commit to regular reviews—you will have more cash in your pocket by next Christmas than you thought possible. I’ve watched families go from “we’re drowning” to “we just booked a holiday” in a relatively short period of time.

Inflation doesn’t care about your feelings, but a budget you actually follow does. Start tonight. Pull up your banking app, grab a coffee (that you made at home), and get your money working harder for you.

To find out more, contact Brooks and Partners for expert financial advice.

This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.