What are the three largest contributors to household spending in Australia? If living expenses rose, where would Australians make the savings to fund the increased costs?
If you worked a full-time job in Australia back in 1975, the average amount you would?ve earned a year would have been about $7,600, whereas today, that figure would be closer to $72,000, according to research by McCrindle.
That?s welcome news, but while we?re earning more than what we did in 1975, things are also costing us more. A loaf of bread is 10 times the price, a litre of milk is three times the price, a newspaper is 20 times the price, not to mention petrol has doubled, with house prices in some capital cities up thirty fold.
We check out the largest contributors to household spending today and where people say they would source additional money if day-to-day expenses increased further.
Housing, food and transport
The three largest contributors to household spending in Australia have been the same for many years, according to the Australian Bureau of Statistics (ABS).
ABS figures reveal three-and-a-half decades ago the largest contributors to household spending were food (20%), transport (16%) and housing (13%), with housing now at the top of that list (20%), followed by food (17%) and transport (15%) respectively.
A separate report by Deloitte highlighted that around 37% of Aussies were concerned about their ability to cover expenses, with more than 50% indicating that they expected to pay even more on housing and energy costs going forward.
What people would do if costs rose further
When asked, if your day-to-day living expenses increased, where do you think you?d source additional money from, here was the top eight responses in a survey of Australians :i
- Reduce luxury spending ? 20%
- Buy fewer groceries ? 12%
- Spend less on transport ? 12%
- Borrow money via a loan or credit card ? 10%
- Draw on savings ? 5%
- Spend less on food delivery and eating out ? 5%
- Cancel subscription services ? 4%
- Cancel streaming services ? 3%.
With costs of living continuing to increase, it is important that we all undertake a regular review of our financial affairs to ensure that we are getting the best deal available. To start the process simply click on the following link to receive your complimentary report courtesy of PSK Financial Services.
Article provided by Andrew Julius, Financial Planner and partner at PSK Financial Services.
Living in Avalon with his Brazilian wife Flavia and three children Stella, Sophia and James, Andrew and his family embrace the lifestyle that the Northern Beaches provides with Andrew apportioning his time between his Avalon base and CBD office. With over 20 years’ experience in the Financial industry,?Andrew provides individuals, families and business owners with the clarity that they need to meet their financial and lifestyle goals. He specialises in providing high quality, unbiased financial advice, across a wide range of areas; including family protection, budgeting, wealth creation, investment management, all aspects of superannuation including SMSF, and pre and post retirement planning.