We check out the three largest contributors to household spending in Australia and where people would source additional cash if living expenses rose.
If you worked a full-time job in Australia in 1975, the average amount you would’ve earned a year was about $7,600, whereas today, that figure would be closer to $72,0001, according to research by McCrindle.
That’s welcome news, but while we’re earning more than what we did in 1975, things are also costing us more. A loaf of bread is 10 times the price, a litre of milk is three times the price, a newspaper is 20 times the price, not to mention petrol has doubled, with house prices in some capital cities up thirtyfold2.
We check out the largest contributors to household spending today and where people say they would source additional money if day-to-day expenses increased further.
Housing, food and transport
The three largest contributors to household spending in Australia have been the same for many years, according to the Australian Bureau of Statistics (ABS).
ABS figures reveal three-and-a-half decades ago the largest contributors to household spending were food (20%), transport (16%) and housing (13%), with housing now at the top of that list (20%), followed by food (17%) and transport (15%) respectively3.
A separate report by Deloitte highlighted that around 37% of Aussies were concerned about their ability to cover expenses, with more than 50% indicating that they expected to pay even more on housing and energy costs going forward4.
What people would do if costs rose further
When asked, if your day-to-day living expenses increased, where do you think you’d source additional money from, here was the top eight responses in a survey of Australians5:
- Reduce luxury spending – 20%
- Buy fewer groceries – 12%
- Spend less on transport – 12%
- Borrow money via a loan or credit card – 10%
- Draw on savings – 5%
- Spend less on food delivery and eating out – 5%
- Cancel subscription services – 4%Cancel streaming services – 3%.
After more tips and insights?
Now that you’re aware that housing, food and transport are generally the biggest expenses for Aussie households, you may be looking at ways you could cut back and save in these areas.
We’ve written a number of articles that may provide some food for thought.
- 9 ways to stop wasting food and start saving money
- The top 10 lifestyle costs draining Aussies of cash
- How to save money by reviewing your providers.
Meanwhile, if you’re an AMP customer and want help keeping track of what you’re spending on things like your groceries, check out the Money Manager function inside of My AMP.
1, 2 McCrindle Research – 40 years of change: 1975 to today - table 2 and 3
3 Australian Bureau of Statistics - Households spending more on the basics - paragraph 5 and 6
4, 5 Deloitte Access Economics – ALDI household expenditure report - page 9 and 23
Teaching your kids to spend wisely25 January 2020 | Manage my money The temptation to overspend is everywhere. Have you taught your kids how to spend wisely? Here are tips to get you started Read more
What type of saver are you?08 May 2020 | Manage my money Almost twice as many Australians think saving for an emergency or a rainy day is more important than putting cash away for a holiday. Find out more with AMP. Read more
What the stimulus package means for us all23 March 2020 | Manage my money AMP looks at what coronavirus financial assistance means for individuals, retirees and the Australian economy Read more
This information is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.
All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.
The information on this page was current on the date the page was published. As a result of changes to the business from time to time, including changes to product, product issuer, services, trust, trustees and other entities, the information may no longer be current. For up to date information, we refer you to the relevant product disclosure statement and product updates.