Yahoo Finance What people are ditching as the cost of living soars
Soaring inflation and sharp interest rate rises have many Aussies rethinking their spending habits, with “fun” expenses on the chopping block for many households.
Going to restaurants was the first thing Aussies had been cutting back on, according to a Finder survey of more than 2,000 people.
Almost a quarter (22 per cent) said they would forgo meals out to save money.
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Online shopping was also a popular expense to bin, with 13 per cent putting it down as the first thing they would stop doing if their budget was under pressure.
TV subscriptions were also a popular sacrifice (10 per cent), followed by nights out at the pub (9 per cent).
Others were prepared to cut their gym memberships (6 per cent), takeaway coffees (6 per cent), car trips (5 per cent) and even heating and cooling in the home (5 per cent).
Only 2 per cent said they would stop their health insurance, and 1 per cent said they would axe their child’s music or sport lessons.
Around 15 per cent said they wouldn’t curb their spending at all, even if their expenses rose suddenly.
Young people were much more likely to cut back (94 per cent) than boomers (68 per cent) in the face of financial pressures.
“Australians are tightening their belts and making some tricky decisions about how they spend their cash,” Rebecca Pike, money expert at Finder, said.
“‘Fun’ has been forced to take a backseat as households grapple with pressures to their budget, including rising interest rates and inflation.”
Pike recommended grouping expenses into essentials and non-essentials.
“Cut from the non-essentials column first and shop around – now is the time to really think about where and how you can save money,” she said.
If your expenses started to suddenly increase, what would be the first thing you would cut out to save money? | |
Going to restaurants | 22% |
I wouldn’t cut anything out | 15% |
Online shopping | 13% |
TV subscription | 10% |
Going to bars/pubs | 9% |
Gym membership | 6% |
Takeaway coffee | 6% |
Driving my car | 5% |
Heating/cooling my home | 5% |
Health insurance | 2% |
Other | 2% |
My child’s sport/music lessons or extracurriculars | 1% |
Life insurance | 1% |
Toys for my kids | 1% |
Kids school fees | 1% |
Data source from Finder.
Inflation a bigger concern than mortgage debt
The cost of living was found to be the biggest financial concern for Aussies at the moment (61 per cent), according to a Money.com.au survey.
This was followed by having a financial buffer in case of an emergency (43 per cent) and having enough cash flow to pay bills (39 per cent).
The ability to meet mortgage repayments amid interest rate increases ranked sixth – chosen as one of the top concerns for 27 per cent of respondents.
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