May 25, 2024

Best ways to save up to $3,800 per year

A straightforward method by which Australians are able to save hundreds of dollars each month despite the rising expense of living

Considering the ‘severe’ cost-of-living strain that Australian households are experiencing, every dollar seems to matter. In response to the persistently high cost of living, Australians are increasing their efforts to make prudent reductions in order to save hundreds of dollars throughout the month.

On the other hand, according to new consumer mood data from the National Australia Bank (NAB), consumers are focusing on “smarter spending,” with half of Australians spending less money on eating out at restaurants and treats such as coffees and snacks.

Fourty-nine percent of people are reducing their spending on entertainment, forty-six percent announced that they were reducing the number of automobile trips they took in order to save money on petrol, and forty-five and forty-three percent, respectively, stated that they were forgoing spending on vacations and food delivery services.

According to the National Association of Banks (NAB), those who were reducing their spending were able to save approximately $320 per month, which is equivalent to more than $3,800 per year.

The consumer stress index of the bank found that concerns regarding the expense of living remained high for the third consecutive quarter. On the other hand, consumers were less anxious about their job security, health, government policy, and supporting their retirement for the first time since late 2022.

Concerns about the cost of living are widespread across Australia, as consumers are struggling to cope with the burden of inflation, which remained unchanged at 3.4% in February.

Inflation is not expected to return to its “target” level of between two and three percent until 2025, according to the Reserve Bank of Australia’s projections.

In addition, consumers are feeling the effects of the situation, as households have reported suffering “extreme” pressure due to the expense of living, as reported by the comparison website Finder.

The most recent cost of living pressure gauge from Finder was 78%, which is a decrease from the previous year’s figure of 83% at this time, although it is still considered to be in the “extreme range.”

However, by March of 2021, that percentage had dropped to just 47%.

Approximately 38 percent of homeowners in Australia are having trouble covering their loan, while 44 percent of renters are having trouble meeting their obligations. This indicates that more than three quarters of the population in Australia is experiencing “extremely or somewhat” worry regarding their financial situation.

In the previous two years, the cost of housing has increased by 22 percent, while the cost of food and groceries has increased by 17 percent, and the cost of power has increased by 17 percent, as stated in a report that was just released by Anglicare Australia.

Rachel Slade, an executive from the NAB personal banking group, stated that Australians are becoming more intelligent as they fine-tune their spending patterns in order to assist in the management of living expenditures and the maintenance of budgets.

According to a survey conducted by the National Australia Bank (NAB) among more than two thousand Australians, four out of ten people are putting additional money into savings and offset accounts, and one out of every five people are paying down debt.

“Carefully cutting back could mean making a small adjustment to spending on coffees and food delivery or making holiday plans that are more budget conscious in order to prioritize things for themselves, their children, or their family,” Slade said. “These are all examples of carefully cutting back.”

The use of real-time notifications and spending insights is assisting individuals in keeping track of where their money is going, while the use of budgeting and goal setting applications enables individuals to create their own plans for their personal finances.