cost of living crisis

COUNTING THE COST OF LIVING

Thanks to the rising rate of inflation, Aussies are making significant changes to their spending and saving practices.

Words: Matilda Meikle

READ IT ONLINE According to new research by leading consumer intelligence platform Toluna, 94 per cent of Australians are concerned about inflation and how it may affect daily life. This rapidly changing reality is a challenge for everyone, especially younger generations who are facing major questions around mortgage and funding options. So, what does it mean in the short-term, and what does the future hold?

THE SURVEY

Toluna surveyed 1,005 Aussies in July, asking about their inflation concerns. The research – which sought to collect real-time consumer insights – found we are dramatically changing the way we spend money to combat rising prices. In fact, many people are putting off spending such as upgrading tech (20 per cent), and delaying costs such as home repairs (20 per cent), in order to save.

According to Sej Patel, country director for Toluna in Australia and New Zealand, these findings are unsurprising.

“In this economic climate, price is the number one factor when it comes to purchasing decisions.

“Our research shows that consumers are truly feeling the pinch of rising inflation. Australians are doing everything they can to cut back and financially safeguard themselves as much as possible – delaying travel, driving less, eating in and putting off any unnecessary spending.” 

“Currently 82 per cent of Aussies aged between 18 and 35 are concerned about mortgage repayments, with 18 per cent seeking additional income such as working for Uber or Doordash, and 16 per cent selling personal items in an attempt to increase funds.”

This need to spend wisely is spreading over all aspects of life. While some are choosing to cancel entertainment subscriptions (12 per cent), others are reducing cover to lower fees for their health insurance (10 per cent).

Even with the world opening up after COVID-19, Australians are now 69 per cent more likely to prepare meals at home to avoid the cost of eating out, and one in four have reduced the amount they spend on takeaway coffee.

CHANGING AUSTRALIA

It seems the hike in inflation is here to stay, along with ongoing rises in interest rates. As such, we all need to change the way we think about our money. However, according to Toluna, young people are feeling the impact more than most.

Currently 82 per cent of Aussies aged between 18 and 35 are concerned about mortgage repayments, with 18 per cent seeking additional income such as working for Uber or Doordash, and 16 per cent selling personal items in an attempt to increase funds.

With over half of our young people currently trying to refinance, we must consider how the economic climate is damaging them, and what it means for the future.

The younger generations are putting off plans to buy a home, and working more than ever to boost their cash flow.

WHAT COMES NEXT?

Inflation and the skyrocketing cost of everyday life is a national concern. Currently, a third of Aussies believe the cost of living will mean having less to spend at Christmas this year, leaving many to wonder what can be done.

According to Sej, this may be the new norm – one that will require adjustment in the business sector.

“With consumers cutting spending at every turn, businesses must identify ways to demonstrate value in order to retain customers,” he says.

“Along with value for money, brands should continue to communicate what they stand for in order to continue attracting and retaining their core customers.”

It’s hard to tell what the future of spending will look like, but this survey is certainly raising questions around how Aussies choose to use their money.