If you have recently felt like your money is not worth as much, you are not alone. Petrol prices feel higher, groceries seem to increase weekly, and even your mortgage or rent is putting more pressure on your monthly budget.
This is not solely an issue faced by Australia, as is often assumed.
A big part of what is occurring with your money right now is driven by global events such as wars, trade tensions, and disruptions regarding energy supply. This combination has led to inflation remaining elevated, and thus, the RBA’s response of increasing the cash rate in order to control rising prices.
These global factors are making daily expenses more challenging to manage in 2026.
What Is Happening Globally And How It Affects You:
Wars Are Increasing Oil Prices
When wars or conflicts happen in major oil-producing regions like the Middle East, the global supply of oil becomes uncertain. The current conflict occurring in the Gulf between Iran, Israel, and the USA has led to trade disruption with key routes such as the Strait of Hormuz being blocked (a critical route where around ⅓ of the world’s oil supply goes through). According to a report by Reuters, geopolitical tension often leads to sudden spikes in global oil prices because markets react to potential supply shortages.
Global Supply Chain and Trade Disruptions
Global conflicts do not just affect oil, but also disrupt how goods are moved around the world. When there are trade tensions between major economies (such as China and the West), supply chains slow down. Shipping routes become more expensive, delays increase, and the cost of moving goods rises.
Inflation and Interest Rates in Australia
One of the biggest ways these global events affect your money is through inflation and interest rates. When oil prices rise and supply chains are disrupted, businesses face higher costs in producing goods. These costs are passed down to consumers through higher prices for goods and services – this is called inflation.
In Australia, since COVID-19, inflation has been higher than the targeted range of 2-3% of the RBA. Currently, inflation sits at 3.8%, with expectations of it rising over the next few weeks, depending on the situation in the conflict in the Middle East. To control this, the RBA has increased the cash rate and, thus, interest rates to 4.1%, which was an increase of 25 basis points, in order to control future inflationary expectations.
How Does This Affect Your Daily Life
Short answer: Total impact of approximately. $70-$115 extra per week
Global Issue | What’s Happening | Direct Impact on You | Estimated Cost Impact |
Oil Price Spikes | Middle East conflict disrupts oil supply | Petrol prices rise quickly in Australia (we import fuel) | Petrol: +$15-$25/week |
Supply Chain Disruptions | Trade tensions and shipping delays (especially in regards to trade relations with China of approximately 24%) | Higher prices on goods (electronics, groceries, and household items) | Roughly 5-10% increase in everyday items Groceries: +$20-$40/week |
Inflation and Interest Rates | Higher mortgage repayments and rent | +150+/month on $500,000 loan Mortgage: +$35-$50/week |
What You Can Do Right Now
While you cannot control global wars, oil prices, or interest rates, you can control how you manage your money.
Focus On Your Biggest Expenses First
Most people try to save money by cutting small things like coffee or daily takeouts. But that will not make a big difference.
Instead, focus on the big three:
- Rent or mortgage
- Transport (Fuel and car usage)
- Groceries
Even a small improvement here can save you hundreds of dollars per month.
Build an Emergency Buffer
In uncertain times, having savings is not optional but essential. You should aim for 3-6 months of basic expenses.
Why this matters:
- Costs are unpredictable
- Job situations can change.
- Interest rates may stay high.
Start small – even saving a little consistently builds security.
Be Smarter With Transport
Fuel is one of the biggest expenses affected by global events. So small changes can have a big impact.
Try:
- Car pooling
- Using public transport when possible
- Reduce unnecessary driving
This would aid in reducing the impact of rising petrol prices.
Update Your Budget Regularly
Old budgets don’t work in 2026. Because prices are changing faster than before.
What to do:
- Review your budget every 2-3 months.
- Track where costs have increased
- Adjust spending accordingly
What This Means For You
Ultimately, the goal in today’s environment is not just to earn more money, but to manage it smarter. Even small, consistent actions can make a big difference over time.
When you focus on controlling what you can — your spending, saving, and financial decisions — you create stability even when the world feels uncertain.
In 2026, the people who stay ahead financially are not always the ones earning the most, but the ones who adapt the fastest and manage their money with clarity and discipline.
References & Resources
Commodities. (2024, September 26). Reuters.
https://www.reuters.com/markets/commodities/
Bank. (2026, March 17). Statement by the Monetary Policy Board: Monetary Policy Decision | Media Releases. Reserve Bank of Australia. https://www.rba.gov.au/media-releases/2026/mr-26-08.html
Weekly Fuel Report | Petrol Price News | The NRMA. (2025). Mynrma.com.au. https://www.mynrma.com.au/cars-and-driving/fuel-finder/weekly-report
Department of Foreign Affairs and Trade. (2024). China Country Brief. Australian Government Department of Foreign Affairs and Trade; DFAT. https://www.dfat.gov.au/geo/china/china-country-brief
Australian Bureau of Statistics. (2025, July 30). Consumer Price Index, Australia. Australian Bureau of Statistics. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release
RBA. (2025). Reserve bank of Australia. Reserve Bank of Australia. https://www.rba.gov.au/
Micallef, C. (2026, March 16). First banks to pass on interest rate pain. News.com.au; news.com.au — Australia’s leading news site for latest headlines. https://www.news.com.au/finance/money/australians-banks-have-started-to-pass-on-the-rbas-interest-rate-hike/news-story/31f6c9fa3106042af391f2da0841a27d?
Commission, A. C. and C. (2012, September 11). Petrol and fuel. Australian Competition and Consumer Commission.
https://www.accc.gov.au/consumers/petrol-and-fuel
Australian Bureau of Statistics. (2025, July 30). Consumer Price Index, Australia. Australian Bureau of Statistics. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release
Use our rate hike calculator to see how rising interest rates may affect you. (2026, March 17). Abc.net.au. https://www.abc.net.au/news/2026-03-17/mortgage-repayment-calculator-rba-march-2026/106460750
