October 7th 2024.
According to a recent national survey conducted by Compare the Market, it appears that many Australians are facing a difficult time with managing their finances. The cost of living has become a major cause of stress for 1 in 5 people, and the survey of 3000 Australians reveals that nearly half of them are dealing with financial worries on a weekly basis.
The survey, which was conducted for the 2024 Household Budget Barometer report, also found that 20% of respondents have seen their savings decrease, while 15% are either in debt or are seeing their debt grow. It's no surprise, as inflation has been consistently above the Reserve Bank of Australia's target range of 2-3% for the past 11 quarters, and is expected to continue until mid-2025. In fact, the Consumer Price Index has risen by 3.8% in the last year alone.
David Koch, the Economic Director at Compare the Market, explains that it's not extravagant expenses that are causing people the most distress, but rather the rising cost of essential items. He notes that most people are not living beyond their means, but rather just trying to get by. Unfortunately, the increasing prices of everyday necessities are making it difficult for them to do so.
The report also reveals that Australians are now spending 33% more on groceries than they were six months ago. The median grocery spend has increased from $150 in January 2024 to $200 in August 2024. This may be due to some individuals choosing to cook at home instead of eating out, as a result of the ongoing pandemic.
In addition to grocery expenses, electricity bills have also seen a significant surge, with the median quarterly bill increasing from $300 to $350 in the last six months. However, government rebates are expected to provide some relief in the short term. Interestingly, while many renters have experienced rent hikes, it's actually homeowners who are more likely to report a decrease in their savings.
One major factor contributing to the financial strain on homeowners is the increase in interest rates. What was once historic lows has now reached its highest point in a decade. As a result, families with a $610,000 mortgage are now paying an extra $1,500 per month, equating to an extra $18,000 a year.
Despite these financial pressures, the survey found that a quarter of Australians have not taken the time to shop around and compare prices in an effort to save on their bills. Koch emphasizes the importance of doing so, as it could result in hundreds of dollars in savings. He urges Australians to stop paying the "loyalty tax" and to actively look for better deals instead of letting bill hikes go unnoticed.
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