Australia’s economy is constantly evolving, and one of the biggest influences on household budgets is the Reserve Bank of Australia (RBA) and its decisions on interest rates. These decisions ripple through the economy – affecting mortgages, loans, inflation, employment, your business and ultimately, your family’s everyday cost of living. In this blog, we explore how RBA interest rate movements affect your wallet, and introduce Knocknock’s “responsive income” approach as a practical way to boost your budget and save more, without needing to sacrifice what you already own.

Firstly, let’s understand the RBA’s Role and Interest Rate Decisions. The RBA is Australia’s central bank. One of its key responsibilities is setting the official cash rate, which is a benchmark interest rate that influences how much banks charge for borrowing or pay on deposits. The RBA’s aim is to maintain:

  • Price stability (inflation between 2–3%)
  • Full employment
  • Economic prosperity and welfare for Australians (RBA, 2023)

When inflation is too high (as we’ve seen in recent years due to global pressures), the RBA typically raises interest rates to slow spending and cool the economy. When the economy needs a boost, such as during a downturn (Covid-19) the RBA may lower rates to encourage borrowing and investment. What Does This Mean for Families? For most Australian families, the most direct impact of RBA interest rate decisions is felt through mortgage repayments and cost of living pressures.

  1. Mortgage Holders: When the RBA increases rates, home loan repayments rise. A 0.25% (or 25 basis points) increase can add hundreds of dollars to monthly mortgage repayments on an average $600,000 loan. For families already juggling school fees, groceries, petrol, and utilities, this can mean serious strain on the household budget.
  2. Renters: Even if you’re not a homeowner, rising rates often push landlords to increase rent, adding pressure to household budgets.
  3. Everyday Costs: Interest rate rises also affect business costs, passed on through higher prices for food, fuel, clothing, and other essentials. Families are forced to tighten their belts just to maintain the same standard of living.

Enter Knocknock: A Responsive Way to Boost Household Income!

At Knocknock, we believe in empowering families to earn more from what they already own. We call this idea “responsive income” – an everyday, achievable way to supplement your household budget by renting out unused items to your local community. Instead of selling, downsizing, or going without, Knocknock allows you to keep your items and make money from them when you’re not using them. How Responsive Income Works: Small Action, Big Impact

  • Example 1: Folding Trestle Table with a purchase value of $100. Rental Rate: $10/day. Rented Out: 100 days/year. Income Earned: $1,000 for the year
  • Example 2: Pressure Washer. Purchase Value: $300. Rental Rate: $30/day. Rented Out: 50 days/year. Income Earned: $1,500/year
  • Example 3: Camping Set (Tent, Chairs, Gazebo). Total Value: $800. Rental Rate: $80/weekend. Rented Out: 15 weekends/year. Income Earned: $1,200/year

Now, multiply the Impact; Many households have over $6,000 worth of rentable items (tools, baby gear, sporting equipment, party supplies, musical instruments, etc.). Renting them out for just 10% of their value for the rental period, a family could earn: $6,000 x 10% = $600 per rental cycle. If each item is rented just 10 times a year: $600 x 10 = $6,000/year added to the household budget. And remember, you still get to use your items when you need them.

Responsive Income = Financial Flexibility. Rather than waiting for a promotion, cutting back on essentials, or taking on a side hustle that demands time you don’t have, Knocknock’s responsive income model helps you: Offset rising mortgage or rent payments, build a savings buffer, reduce financial stress and stay connected to your community. As Dr. Juliet Schor, a Harvard economist and sharing economy researcher, highlights: “Platforms that allow access to underutilised assets… reduce waste and increase household efficiency.”  (Schor, 2014)

It’s Time to Rethink Income; In a world where everything is getting more expensive, Knocknock offers an alternative, not more work, just smarter use of what you already own. The RBA may continue to raise or lower rates depending on inflation and employment conditions. But with Knocknock, you don’t have to wait for policymakers to change your financial situation. You can take action today.

Final Thought; The cost of living isn’t going down any time soon. But your items sitting in the garage or cupboard could be earning you real money. Knocknock helps you turn what you have into responsive income, helping your family thrive, not just survive.

Ready to Boost Your Budget? Download the Knocknock app today. List your items in under 3 minutes. Start earning tomorrow.

References

  • Reserve Bank of Australia. (2023). Monetary Policy Framework. https://www.rba.gov.au/monetary-policy/

  • CoreLogic. (2024). Rising mortgage rates and borrower behaviour.

  • Schor, J. (2014). Debating the Sharing Economy. https://www.greattransition.org/publication/debating-the-sharing-economy

  • Australian Bureau of Statistics. (2024). Household Impacts of Cost of Living.