A recent survey conducted by NAB has revealed that on average, Australians need an extra $207 a week to ease cost-of-living pressures.
The cost of living in Australia continues to rise, but wages aren’t keeping up, according to NAB. Fuel, childcare and energy prices continue to surge, and for the first time, research has revealed just how much is needed to ease these financial pressures.
In February this year, NAB released its quarterly consumer behaviour study, which revealed that Australians need an extra $10,764 per year, per household to ease financial pressure.
Residents in NSW claimed they needed the highest figure out of every Australian state and territory, coming in at $221, and higher income earners reported needing 30 per cent more extra cash than low-income earners to feel relaxed.
People living in urban areas are also feeling the pinch of financial pressures more than those living in regional centres and rural areas. He data also revealed that women need an average of $12 a week more than men, while consumers with children need an average of $258 a week compared to only $191 for households without children.
“While consumers told us they were a little less concerned about their household’s current financial position in the fourth quarter, being unable to pay a bill (particularly utilities) continues to have by far the biggest impact on those households most concerned about their finances,” NAB chief economist Alan Oster said.
However, despite growing financial pressures, the number of people cutting back on lifestyle luxuries due to rising household cost pressures has actually fallen in the last quarter.
“When we look back to how consumers told us they were spending a year ago, far fewer say they are cutting back on things such as travel, eating out and entertainment,” Mr Oster said.
Credit Suisse later confirmed that consumers are stressing about their budgets.
“There are major headwinds for the consumer,” a Credit Suisse economist wrote on Wednesday.
“We continue to look for a steep climb in the household saving rate as house prices and equities weaken, undermining net wealth. Negative wealth effects are likely to be compounded by tighter credit conditions, and sluggish real wage growth.”
The survey also found that the ability to fund retirement remains the nation’s biggest financial fear, followed closely by our family’s futures and our ability to raise $2,000 for an emergency, which Mr Oster says is quite frankly, “alarming”.
“Looking beyond financial concern to actual hardship, more consumers faced some form of financial stress or hardship during the quarter, and once again being unable to pay a bill (particularly utilities) caused the most stress.”
All of the above financial issues not only affect our day-today lives, but also our lending capacity. This can have a huge impact on self-employed individuals, small business owners and homebuyers, who are struggling to secure the finances they need to fund their business and property requirements.
For help navigating the home loan and business loan market, contact Complete Financial Services today!