Younger Australians were found to have cut back on their spending the most compared to other age groups, according to a report by CommBank iQ.
In its Cost of Living Insights Report, CommBank iQ found that Australians between the ages of 25 and 29 had reduced their spending by 3.5% compared from a year ago.
With inflation considered, these young Australians had reduced their consumption by more than 7% compared to the number seen in May 2023. They were the only age group that had cut back on both their essential and discretionary expenses as other age groups had opted to reallocate their budgets to cover the increase in prices for goods and services.
CommBank iQ head of innovation and analytics Wade Tubman said that despite the majority of other age groups increasing their spending on essential goods, the younger age group had been going the other direction.
“This highlights the difficult choices people in this age bracket are making, with some having to make larger lifestyle changes like foregoing their health insurance altogether. The decrease in utilities spending could also suggest young Aussies are moving back in with parents or into shared accommodation to split costs,” said Tubman.
On a national level, there was a 2.5% increase in spending, with essentials seeing an increase of 3.6%. On average, consumers spent about $1,472 per month for their essentials, led by the increase in their spending for insurance (+8%), utilities (+6%), pharmacies (+6%), and supermarkets (+5%).
“Many Australians are having to allocate more of their wallet to essential living expenses, rather than other areas where they may prefer to direct their spending. The cost-of-living initiatives announced in the Federal Budget, for example the energy bill rebate, reflect the increased spending by Australians on essential items like energy,” said Tubman.
“While spending in regional areas continues to outpace that of metro areas, this gap has narrowed when compared to previous quarters. This raises the question whether people in metro locations have downsized their wallets to adjust to higher prices, and what spending growth remains is now ‘the new normal’.”
