More Australians have their money on their mind in 2023, according to the recent findings from a National Australian Bank survey.
Twenty-six per cent of Australians will prioritise money matters first, with other expenses on the back burner, including travel plans.
NAB executive Paul Riley observed, “It’s no surprise many people are willing to put other traditional new year resolutions aside to prioritise getting to grips with their money.”
Many Australians still prefer financial stability first this year as these findings indicate. “Many of our customers are telling us they’re making changes given the current cost pressures,” Riley added.
Further Financial Insights
The NAB findings coincide with the current economic outlook of the country. The change in Australians’ money decision-making reflects some of the effects of budgeting versus higher prices.
In the same survey, 17 per cent of Aussies also plan to put money first even ahead of their health. Still, a small percentage of Australians are not concerned that much, with 13 per cent not having any concrete financial plans. A further 7 per cent found themselves still unready for budget cuts or saving money.
The recent NAB survey also shows a few more insights into how Australians plan to use their money.
Women value saving money more compared to their male counterparts, including personal and home expenses. For example, more women plan to cut down on eating out at 45 per cent against only a 37 per cent commitment from men.
Another 44 per cent of the female segment of the survey are also willing to reduce expenses on clothing and fashion against 35 per cent of the male respondents. Women also lead in trying to save more by cutting down on shopping for household items at 36 per cent versus the 30 per cent of men who were also willing.
Inflation, Rising Costs, and The Younger Generation
Riley also disclosed that younger Australians are more concerned these days with their money. Gen Z and millennials were in the survey, with 30 per cent from the age bracket of 18 to 29 year-olds foregoing travel in favor of saving money. Other younger respondents tallied 26 per cent in favor of prioritising money over social media.
Riley further explained that “This is particularly interesting given Millennials and Gen Zers are digital natives who are often very driven by experiences like travel.”
These insights are a direct reflection of what some economists believe to be a way to counter any upcoming effects of inflation. While it is still early in the year for them to predict upcoming economic adjustments, many Australians seem to be gearing up early on to balance the effects of the economy.
Experts predict even more wallet-tightening in the coming months due to inflation and the rising costs of goods and services.
Australian Economy: Gearing Up for Inflation?
Australians’ views on money this year are mainly due to continuing concerns about inflation and rising costs of goods. While the country is quickly recovering from the Covid era, everyone is just beginning to feel its after-effects.
Inflation rose to an all-time high of 7.3 per cent last September 2022 since 1990. It did subside to 6.9 per cent around November, but economists are still not optimistic about it. The Reserve Bank of Australia puts the normal inflation rate at 2 to 3 per cent.
The Australian Bureau of Statistics reported a higher consumer price index increase of 7.3 per cent late last year. Meanwhile, food and nonalcoholic beverages inflation alone was at a high of 9 per cent during the last quarter of 2022. Another major indicator was the household savings ratio pegged at 6.9 per cent.
Australians’ optimism levels also dipped from 13 per cent last March 2022, to 8 per cent late last year. What is also surprising is that this includes even the more stable high-income-earning segment. Those earning $125,000 or more per annum, the highest ceiling income in the statistics chart, were less optimistic than those who are earning less.
Australians Adapt to Rising Costs
Ninety-two per cent of Australians in the ABS statistics report also noticed the increase in goods and services during the last 6 months. Everyone in the various economic levels is feeling the rising costs of everything, including groceries, essentials, and transportation expenses.
The aforementioned NAB survey reflects the same sentiments: Australians are willing to cut down and save money, except for those three important expenses.
Some of the immediate price increases from last year have made a major impact on different commercial sectors in Australia. The first three included new housing for homeowners at 3.7 per cent, followed by domestic-use fuels at 10.9 per cent, and furniture at 6.6 per cent.
Most of these economic changes are after-effects of the pandemic, the war in Ukraine, and higher consumer demand. Economists still consider the country a top performer in the global economy. However, these rising prices are a concern as many people are spending more and feeling its major effects. Their biggest concern is if the inflation and higher prices both stretch on as the year progresses.
Treasurer Jim Chalmers reflects on these factors and if the changes of inflation continue, “Left untreated, inflation which is too high for too long undermines living standards and jobs, and wrecks economies.”
“But the medicine is also very tough to take—and millions of Australians with a mortgage are feeling that pain right now,” he added.
Due to the above factors, many other Australians had to face the harsh reality: Companies had to close down from the effects of the pandemic. Importation and supply lines were greatly affected by sanctions resulting from the Ukraine war. It resulted in higher costs of oil, gas, and other essentials, affecting global operations.
The combination of these national and international issues led to all-time high inflation rates, which brings us to the effects on the consumer level.
The Australian government has presented measures to aid the economy through financial support packages and increases in monetary payments, especially for Centrelink beneficiaries. Those under Centrelink will be hit hard with an overextended inflation rate. These additional payments are hopefully going to tide them over until the economy improves.
Elsewhere, many Australians are also finding ways to finance their needs. However, fewer expenses and budget cuts will affect the quality of life of many people. Others are adapting by getting additional funding from unlikely sources, such as extra work, or selling off other possessions, hopefully as a temporary fix. Others may use flexible loans to support their businesses or household operations.