Yahoo Finance 'Scary' cost-of-living mistake young Aussies keep on making
It might seem like everyone is living the high life on social media, but that's not actually the reality.
Aussies are making some tough decisions this year. What started as a cost-of-living crisis is becoming a cost-of-lifestyle crisis.
Rising prices and a constant stream of household bills have taken a big bite out of our holiday and leisure budgets. Now I think it's time we called out social media for raising impossible expectations.
Every time we open our phone we’re reminded of what we’re missing out on. Social media is riddled with get-rich-quick schemes and “influencers” who have made a career out of faking their wealth.
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Scroll and you’ll see an acquaintance from five years ago sipping sangrias in Spain or someone from high school ripping the cover off a new car. It’s like a Pandora’s box at your hip pocket and we seldom use our power to switch off.
But don’t be fooled by the “Frauda” handbags and the fallacy of false wealth. While some seem to be living the high life, there’s a good chance you’re more financially secure than they are! Here’s why.
The rise of 'debt lag'
While some return from overseas with jet lag, others experience ‘debt lag’.
Compare the Market research found that as many as one in five Aussie holidaymakers are using Buy Now Pay Later schemes, credit cards, or personal loans to fund their vacation.
That’s a little bit scary when it would take over 49 years and cost more than $20,000 in interest to pay off a $5,000 credit card debt making the minimum repayments.
Warren Buffett was right when he said “only when the tide goes out do you discover who has been swimming naked.” You don’t want to be the one who’s caught.
But Compare the Market also found that 14 per cent didn’t plan to take a holiday within the next 12 months. To some, that’s unfathomable but the reality is - it may be good sense!
Ask your parents or grandparents if they were planning a big international getaway every year and they would say: “No, it's a new phenomenon”.
But the reality is that when money is tight, you might have a better time in Yamba than you would in the South of France, where the meagre Aussie dollar won’t stretch far.
Some of my most cherished family holidays have been simple ones here in Australia. They may not have been glamorous, but they were stress-free!
Choosing a domestic destination or skipping a holiday to save could put you in a better place to afford a bigger trip in future.
Don’t 'fake it till you make it'
Rose-tinted Instagram filters seem to be the perfect disguise for the pain we’re all feeling. The vast majority of Australians are still doing it tough.
Our Compare the Market data shows the average Australian spends $355 quarterly on their electricity bill, $62 a week on fuel, and $192 a week on groceries.
But just because this might be a year we need to tighten our belts doesn’t mean we have to live in a “cost-of-living lockdown”. It’s about finding the right balance for your budget.
Spending a bit of time researching and comparing your bills could help you fund a great dinner out or weekend away with family.
It’s important to treat yourself every now and then so you can still experience life’s enjoyments. Just don’t try and keep up with the Kardashians.
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