West Australians already struggling with the price of food and bills may fall through the cracks following the latest interest rate rise.
Financial counsellors who were already seeing a growing number of people battling to make ends meet are concerned yesterday's decision to lift the cash rate to 1.35 per cent will be too much for some households to handle.
Mandy Dehnel, who supports a team of counsellors at the Salvation Army, says it may make the difference for those teetering on the edge with their finances.
"Increased issues with mortgages ... I can only guess that will get worse as time goes on," she said.
"When you know that there is a very small gap between what you've got, and what you can afford ... that is such a feeling of dread."
Less spending, more saving
The Reserve Bank of Australia's decision to lift the cash rate by 0.5 percentage points for the second month in a row is aimed at putting the breaks on inflation and reducing the price of goods and services in Australia.
But with the Federal Government flagging things will get worse before they get better, Ms Dehnel wonders how people already struggling will survive.
"The only piece of advice that I really have is to get the help early...as early as you can," she said.
"Where are you going to go? What are you going to do? How can you change your circumstances to make your budget fit?"
The interest rate hike is designed specifically to reduce spending and encourage people to save, according to independent economist Conrad Liveris.
"While they're raising your mortgage rates, your savings rate should be going up as well," he said.
The higher interest rate means loan repayments will increase, but the rate on savings accounts should go up too.
Rate hike difficult, but necessary: economist
The RBA has warned of interest rates rising even further in coming months.
The rate hikes will take another one to two years to ease cost of living pressures, but it's a necessary move, said Mr Liveris.
"We've got very high inflation here in WA," he said.
"A lot of it is from the government [COVID] stimulus that started two years ago. It's actually about reigning that in," he said.
Mr Liveris said it was particularly important to reduce inflation in WA, which is currently the highest in the country.
The RBA is hoping increasing interest rates will do just that, but it means pushing people to spend less money while the economy corrects itself.
"People are going to be giving away some of their more discretionary spending," Mr Liveris said.
"They may not be going out two nights a week for dinner or drinks."
Piara Waters football club president Chad Sandilands said "the old beers down at the pub are one of the first things to go" as he looks to tighten his purse strings.
"I'm becoming more mindful of day to day spending, so it's something to keep a close eye on," he said.
Businesses could face more pain
With people less likely to spend their money on non-essentials, business owners may feel the pinch.
Despite having worked in the hospitality sector for decades, restaurant owner David Vogdanof says it's still difficult to predict how his business will fare.
For Mr Vogdanof, the day-to-day expense of rising costs have had a much more obvious impact on his business.
"We're getting two, three letters a week with price increases between five to 10 per cent, which is massive," he said.
Mr Vogdanof hopes the locals who typically frequent his restaurant will be able to continue supporting the business.
"We're obviously concerned that people with mortgages ... hopefully they still keep coming out," he said.
"I think maybe a lot of people have been putting money away as well, expecting this sort of increase."
With the country reeling from the impacts of COVID over the past two years, businesses may still be in for more pain.
"COVID has been challenging ... it's just going to be more challenging as we go forward," Mr Vogdanof said.
