Aussie spending habits paint a picture of priorities

As discussed in a NAB report, “when it comes to budgeting, Australians are sacrificing smaller, regular purchases to free up money to keep spending on what they love most – their kids and pets.”

People are cutting back on luxuries in response to a rising cost of living. Over the last quarter, 57 per cent of consumers have cut back on eating out, 49 per cent have reduced spending on coffee and snacks, and 49 per cent have pulled back from entertainment spending.

Where is this extra money going? For six out of 10, it’s put towards everyday expenses; for four out of 10, it’s to top up savings; and for two out of 10, it’s to pay the mortgage.

Meanwhile, just 14 per cent cut back on spending on children’s activities, 20 per cent on their pets, and 23 per cent on gardening and cleaning. Minor spending cuts are reportedly saving an average of $320 each month.

“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,” said NAB personal everyday banking executive Paul Riley.

“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.”

The spending habits of young Western Australians were analysed in a Bankwest report. The data revealed that Gen Zs are spending at a higher rate than other generations. While Millennials (-8 per cent), Gen X (-7.4 per cent), and Baby Boomers (-7.2 per cent) each saw a substantial decline in customer transactions over the year, Gen Zs saw an increase of 2.5 per cent.

Throughout the year, the average value of Gen Z’s transactions grew by 15 per cent; double that of any other generation. Similarly, the group’s volume of transactions grew by 6 per cent.

Mortgage holders are feeling the strain of the present economy, with older consumers being hit hardest, said Bankwest general manager products and digital services Peter Bouhlas: “It’s clear the current economic environment is proving challenging for most Western Australians, particularly those with a mortgage.

“However, this data shows the economic environment that is putting so much pressure on older generations is having very little effect on the spending behaviours of younger Western Australians.”

These trends were experienced across many sectors, as 25 identified ‘spend trends data’. Just 10 sectors experienced declines year on year for the number of Gen Zs spending, compared to 23 sectors for Millennials and Gen X and 24 declining for Baby Boomers.

Some of the biggest increases revolved around the travel industry, with auto rental spending up 32 per cent over the year and airline spending up 17 per cent. Older generation recognised a stable and even declining spending in this area.

Meanwhile, pharmacy and food spending among Gen Zs was up 14 per cent and 7 per cent, respectively. For Millennials, these were down 4 per cent and 5 per cent, respectively; Gen X, down 4 per cent and 4 per cent; and Baby Boomers, down 3 per cent and 5 per cent.

“Western Australians are used to the term ‘two-speed economy’ referring to the higher wages paid to mining workers, but it could easily be used in reference to the pressures currently being felt by Gen Z compared to others,” said Bouhlas.

“Gen Z is the generation most likely to comprise the casualised workforce and is less likely to have the significant financial responsibilities of their older counterparts at this stage in their lives. We know from the low unemployment rate that businesses are crying out for workers, so that means there is a generation of young Western Australians in high demand for work, with fewer spending obligations.

“The experience of Gen Z at this time is unfortunately not that of the majority of Western Australians, and we encourage any customers concerned about their circumstances to reach out so we can support their unique position.”

[Related: Mortgage holder spending halves YOY]

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

To reach Jack, email him at: This email address is being protected from spambots. You need JavaScript enabled to view it.