This article is from the second issue of CommBank's magazine, Brighter.

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As part of CommBank’s mission to build a brighter future for all, respected finance commentator and expert Jess Irvine will be answering reader questions in a new column for CBA’s bi-monthly Brighter magazine which will also be published on CBA Newsroom. An economist by training, Jess has nearly two decades of financial reporting experience and a passion to help people understand and feel better about money.

Read on below for Jess’s first two answers to reader questions about fixed versus variable rate home loans and how to talk to kids about the rising cost of living. If you have a question for Jess, you can email it to

But first, hear from Jess on why, particularly in these times, having a household budget is the ultimate form of-self care.

When you picture self-care in your head, you might think of a manicure or meditating. Me? I think of my household budget and the colourful set of highlighters I use to track and categorise my spending every week or so. I know, weird. But hear me out.

I reckon taking time out of your busy day to track your money and create a budget is the ultimate form of self- care and I’m here to urge you to try it. The word “budget” gets such a bad rap these days, conjuring images of restriction and tedium. But to me, a budget is just a written-down statement of your income and expenses – and resulting surplus or shortfall – over a period of time. Budgets can come in many shapes and forms – and you get to decide which method suits you best!

Some people like to sit down ahead of time and attempt to anticipate upcoming expenses and income over a coming period – say, a year – and try to stick to that. If you’re just starting out, though, I think it’s better to start small and simply commit to tracking your actual spending and income over a period of time. Why not start by grabbing a blank sheet of paper and a pen and simply write down every purchase you make for one week?

I reckon taking time out of your busy day to track your money and create a budget is the ultimate form of self-care.

Over time, you can build up to tracking your spending for one month. Knowing what your monthly living expenses are will help you set an appropriate target for an emergency fund, which is generally recommended to be between three and six months of living expenses. Having a pot of money set aside for any unforeseen dramas is like a life jacket – it makes you feel secure, even if you don’t need it.

Budgeting helps you borrow with confidence (knowing that you can afford repayments) and plan for your retirement needs. Just don’t forget to include provisions for all those big, lumpy expenses, like insurance or car rego, which hit outside the monthly cycle. Your budget can be a powerful tool in helping you plan for tomorrow and living the life you want today by spending your money in alignment with your highest values and self.

Yes, it takes a little bit of time. But it’s one of the best investments in your future self that you could ever make.

Budgeting basics

If you want to start budgeting, there are many methods you can try. Pick one and if you don’t like it, move on to the next.

1. Pen and paper

Budgets don’t have to be fancy. Go old-school and track your spending and income over a period of time.

2. Spreadsheet

For the number-lovers out there, you can enter your digits into an Excel spreadsheet.

3. CommBank app

The CommBank app has a range of tools to help you get started, such as the Monthly cash flow view, which shows income, linked investments and spending, splitting them into different categories – like entertainment and eating out – and giving a snapshot overview by month.

Jess Irvine Jess Irvine

Question 1: I’m about to refinance my home loan as my low fixed rate is about to expire and, honestly, I’m feeling stressed. My interest rate is rising from 2 to 6 per cent. I haven’t curtailed my spending like many of my friends have and I don’t have much of a savings buffer to absorb the increased repayments. What will happen with rates? Do I go for a fixed or variable rate?

Jess’s answer: Ouch. My 1.84 per cent fixed rate just expired so I feel your pain. There are about 900,000 Aussie borrowers who will roll off low fixed rates this year and it sounds like it’s time for you to join your friends in curbing your spending.

This is no failure on your part – it’s actually the whole point. The Reserve Bank has been lifting rates to put the squeeze on household cash flow. Why? So we spend less and businesses have a harder time putting prices up, hence reducing inflationary pressure.

As for choosing fixed or variable, unfortunately the interest rate cycle is hard to predict. A fixed-interest loan gives certainty of repayments but you may end up overpaying if variable rates go down. Fixed-rate loans also often come with more restrictions – such as less ability to make extra repayments and no offset account to help reduce interest costs. One option is a split loan, with part of it fixed and part variable. Talk to your CommBank lender to explore your options.

Question 2: One of the things I’m finding difficult about the pressures on our household budget right now is what to tell my kids. I have an eight year old and a 13 year old who are used to a lifestyle that includes holidays, dining out and costly activities. Now we’re making an effort not to spend and, while neither of them have commented on the change, it seems like a miss not to discuss this with them at all.

Jess’s answer: One of the things that I’ve found as a parent is that kids understand much more – and at an earlier age – than we often give them credit for. If you’re making an effort to spend less, it’s likely your kids have already picked up on that.

I find that honesty really is the best policy here. Do your kids know, for example, that when you bought their home, you borrowed money from the bank to do so? And that means every month you need to pay money to the bank on the loan?

I’ve been talking to my own son about this since he was about five. I’ve also told him that we’re going through a period just now when loans are more expensive so there is less money in our family budget to spend on other things. I’ve reassured him that this is normal – borrowing costs go up and down. But just at present, they are up and so every family with a home loan needs to cut back on other spending.

I think you’ll find they understand it. And you can spend time as a family thinking of fun and free activities you can still do together, like going to the park, beach or museum or having movie nights.

Do you have a question for Jess? Send your questions to At this stage, Jess can only answer questions in her Q&A column and by submitting your question for Brighter, you consent to having your question and the response you receive from Jess published in the print and digital edition of Brighter.

For more of Jess’s money saving tips and support available to help you navigate the rising cost of living, visit:

Photography by Julie Adams.

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  • Brighter magazine provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider the relevant Product Disclosure Statement and Terms and Conditions, and whether the product is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.

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