Perth Food Prices

Reporter: Graeme Butler

As if we needed another reminder that we're headed for rough times, but the Australian Bureau of Statistics has just revealed what many people suspected...it's costing more to live. Perth supermarket prices have shot up by 5.4% in the past year. That's roughly $5 on a basket of $100 a week.

"$5 a week at the supermarket checkout is going to be a significant issue for people who are trying to actually stretch that amount of money" says Sue Ash.

Sue Ash from the W.A Council of Social Services says its evidence of the pain many families have been feeling and it's no wonder basics like rice shot up 25%. Butter was up 17% and teabags were up by 16%.

John De Boar has seen the good and bad side of like. Illness forced him out of the workforce and onto a disability pension. He now lives at home with his Mum who is also on a pension. Luxuries are few and far between, but John and his Mum are far from alone and more and more people are staring down the barrel of similar hard times.

Pippa Elliot is a Financial Advisor with Momentum Planning in Perth. She's already seeing clients hit by cutbacks and redundancies.

With words like cutbacks, retrenchment and recession floating around, what can you do to help dodge the bullets or soften the blow?

"What they're spending they can totally control…get rid of those credit cards and really look to spend what you have to spend rather than buy now pay later. That's got us into a lot of trouble with the credit crunch".

Even if you're working and don't have a monster mortgage, it's a good time to be building a buffer between you and bank, but the first step is to work out where your money goes. Do a budget and be honest about it.

"Start by writing all of your expense items on the left hand side and put your income or your inflows at the top. Then include the things you have no choice about paying such as the mortgage, utilities and school fees etc and you put all of those at the top and then what ever is left you have to divide up between what you would like to have, like what you're going to spend on food going out entertainment".

Pippa says start with all items you MUST pay, such as mortgage, power and school fees.

Once you know what you spend, you can work out what needs to stay and what can go.