Budget priorities change
Australians are finding smarter ways to save, with small cutbacks freeing up around $320 a month to spend on the things that matter to them.
As people continue to make cutbacks to manage rising cost-of-living, data from research conducted by NAB Economics shows they are more likely to dine out less and pause streaming services, in favour of buying quality pet food and paying for children’s dance lessons.
The latest NAB Consumer Sentiment survey shows in the past three months:
- Around 14 per cent of respondents had reduced spend on children’s activities (sport, dance classes), followed by 20 per cent on pets (food, pampering, insurance) and 23 per cent on gardening and cleaning services
- Around half had cut back on eating out (57 per cent), micro treats like coffee and snacks (49 per cent) and entertainment (49 per cent).
- The extra funds were being used for everyday living expenses (6 in 10), to top up savings or offsets (4 in 10) or pay down mortgages (2 in 10)
NAB Personal Everyday Banking Executive Paul Riley said Australians were finding smarter ways to save, with small cutbacks freeing up on average $320 a month in their budgets to spend on the things that matter to them.
“When the cost-of-living crunch started, we saw early signs of people making cutbacks here and there, what we’re seeing now is that pattern of behaviour has become entrenched in our everyday lives”, Riley said.
“For many it’s about prioritising spend in the areas that mean the most, and unsurprisingly children and pets are high on the list.
“There is an emotional element to budgeting and this research shows where people’s priorities are.
“You can see that cutting back on daily treats or bringing your lunch to work is clearly worth it for those who want to make brunch with friends on the weekend. And while streaming services are great, we’re seeing parents pause those to provide their kids with more live experiences”, he added.
The NAB Economics research also revealed that while some Australians are practising thoughtful spending, others are bolstering their savings.
In the past year, the average balance of NAB’s high interest savings account grew by 25 per cent.
“Despite the pressure from the higher cost of living, it’s interesting to see Australians are still determined to prioritise their savings”, Riley said.
“More than half of Australians are switching to less expensive products, doing their research before making a purchase or looking for a deal.
“It’s definitely surprising to see this growth in savings balances, especially when prices remain quite high, but it’s a welcome sign that Australians are more deeply engaged with their finances now than they have been for a long time.”
The latest NAB economics data shows while that three quarters of Australians are trying to save, concerns around being able to save is also high.
“For some people, putting money aside into savings may not be possible right now”, Riley said. “For anyone struggling financially, I encourage them to contact their bank straight away. There is help available.”