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$2,274 a year: Aussies hooked on retail therapy despite rising cost of living

·3-min read
Cash and woman with child shopping
Aussies spend thousands a year on stuff that makes them feel good. (Source: Getty)

Aussies may be living through a cost-of-living crunch but that’s not stopping us from spending money to make ourselves feel better.

In fact, retail trade actually grew by 0.9 per cent in May despite the rising costs of housing, food and petrol eating into households budgets.

As many as 86 per cent of people admitted to comfort spending, according to data from comparison website Mozo, with more than 37 per cent doing so at least once a week.

Negative emotions drove a lot of this spending. Boredom was the top reason people turned to retail therapy - around 44 per cent - followed by stress (41 per cent) and unhappiness (35 per cent).

The bulk of comfort spenders splashed out on clothes in times of distress - with 46 per cent of survey participants spending money on clothes when they were feeling low - followed by takeaway food (47 per cent) and chocolate (46 per cent).

Around half of people were putting these expenses on their debit cards, but many were going into debt to fund their vices via credit cards (32 per cent) and buy now, pay later (30 per cent).

In total, Aussies spent around $39 billion on feel-good purchases, which amounted to $2,274 on average per person.

People aged between 25 and 34 forked out the most to keep themselves happy, spending $2,864 a year.

Mozo spokesperson Tom Godfrey said Australia’s comfort-spending tendencies were concerning.

“As interest rates rise and cost-of-living pressures increase, comfort spending could be a recipe for adding additional stress to household budgets,” Godfrey said.

“Although Aussies might be tempted to purchase their way out of the winter blues, splashing the cash on eating out or the latest fashions could leave them in the red and feeling the pinch.”

Godfrey offered a couple of tips to curb comfort spending:

  • Out of sight, out of mind - With many of us spending money to pass time when we're bored, unsubscribing from retailer marketing emails can help to remove the temptation of cashing in on email sale offers.

  • Set up a savings account for comfort spending - If you don’t want to cut out comfort spending completely, it’s worth considering opening a savings account dedicated to feel-good purchases to avoid going into debt.

  • Avoid spending outside your means - To ensure you don’t overspend and rack up debt, it pays to set a budget and plan your comfort purchases.

  • Look for an alternative remedy - If you are tempted to spend when you experience negative emotions, try out other mindful methods of reducing stress or boredom, such as meditation, walking or journaling.

  • Make use of a money-management app - You can use apps to track your expenses and curb overspending.

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