Westpac and a number of smaller lenders recently announced “out of cycle” rate rises. Predictably, other big banks followed. It means they have jacked up their rates even though the Reserve Bank’s cash rate has remained on hold at 1.5 per cent.

There are ways to navigate rising interest rates. What’s different this time around is that many banks have tightened their lending criteria. So while it’s always worth checking to see that your home loan rate is competitive, the solution may not be as simple as refinancing to a mortgage with a cheaper rate.

However, the old saying “watch your pennies and the  dollars will take care of themselves” rings true in a climate of interest rate hikes. Some Australians may struggle to meet their debt commitments – be it a home loan, personal loan or credit card. Coming up with higher repayments is never easy but one of the best ways to find the extra cash is to revisit your household budget.

Putting together a sensible, real-life family budget is not hard and you certainly don’t need to account for every last cent. It does mean committing a few hours to work through an initial budget, but after this all that should be required is a bit of fine-tuning throughout the year.

Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.