Recent household spending statistics from the Australian Bureau of Statistics (ABS) indicate that we have more money and better living standards since the last survey in 2003-04. While prices of goods and services have risen by 19%, the mean household income has increased by 50%. In short, costs are on the rise, but our pay is rising faster.
This is a contradiction to popular opinion, media messages and political rhetoric. At a recent Ipsos Mackey presentation based on their data research, we heard about families struggling to make ends meet. In particular, finding money for necessities, rising bills and payday-to-payday living are high on the levels of concern for some people.
What is the reality then? You can first look more closely at the ABS statistics, which confirm some common sense conclusions. There are many Australian families and socio-economic groups spending below the weekly household average of $1236. Some 20% of people rely on government pensions and allowances as their main source of income, and both people living alone and over 65s had lower expenditure and often lower disposable income. Families with children spend an average $1748 per week, which would require $92,896 after-tax earnings per year – a tough figure to achieve for many.
The ABS points out the stats don’t tell the full story on financial stress, either. While the survey does look at prices, consumption patterns and spending, it doesn’t indicate whether people are missing out on “key” items or whether they are borrowing elsewhere to meet their needs. Core costs like housing are up (55%), but so is spending for internet access (152%), pay TV (95%) and holidays (50%), which shows that perception of key items may also be changing.
This last point can’t be overlooked. Most of us want creature comforts and luxury items, but could our desires also be driving general disappointment? It’s not hard to imagine that the cycle and wanting and not receiving could leave us feeling like things are constantly getting worse. While focusing on the negatives may just be human nature, it’s also good to consider the statistics that show we’re in a better place than six years ago too.
While prices are on the rise, recent statistics from the ABS show we have more money and better living standards than six years ago. So, are we battling to afford the essentials, or do we just expect more?
Measure how much you spend against averages from the ABS. Here’s how people break down their budget:
- 18% on housing
- 16.5% on food
- 15.6% on transport
- (or half on housing, food and transport)
- 2.6% on fuel
- 2.6% on alcohol
- 13.1% recreation
- 5.3% on medical expenses
- 3.6% on clothing
Check out last week’s blog on comparison websites if you missed it, or discover how you can tweak your budget with some magic money saving ideas.