Australians are under increasing financial stress and are failing to make ends meet
A GROWING number of Australians are spending every cent they earn as cost of living pressures go up. This is why it’s getting tougher to put money away.
Saver HQ
Don't miss out on the headlines from Saver HQ. Followed categories will be added to My News.
A GROWING number of cash-strapped Australians are spending every cent they earn each month and many have been hit with significant wage cuts.
The latest biannual ME Household Financial Comfort report released today (Monday) examined household finances over the past six to 12 months.
It revealed 52 per cent of households are spending all of their income each month — an increase of three per cent from the previous report.
And a quarter of households have suffered a fall to their household income in the same period.
ME consulting economist and the report’s co-author Jeff Oughton many Australians had little or no savings buffer and it was putting heightened stress on families.
More than half of those surveyed had cash savings of less than $10,000; another 26 per cent said they had savings less than $1000.
“Non-discretionary items like putting petrol in your car and turning on the lights and keeping warm, those costs are rising much faster than general prices and people’s incomes,’’ he said.
“There’s a cashflow squeeze on and equally about 50 per cent of people don’t have a dollar left at the end of the week.”
ME surveyed 1500 households and found that for people with low levels of financial comfort things are only getting worse.
The report also showed in the past year 17 per cent of households could not always pay their utility bills on time.
Another 19 per cent sought help from their family and friends to help make ends meet.
Financial Counselling Australia’s chief executive Fiona Guthrie said increasing reliance on credit card debt was a major issue.
“We can’t continue with these big debts problems and not have an impact of people’s individual financial welfare,’’ he said.
“A lot of it comes down to credit card debt — it’s too easy to get.”
Latest Reserve Bank of Australia figures show Australians owe more than $52.2 billion on credit cards and $33.1 billion of that is accruing interest.
Many credit card carry interest rates of 20 per cent or higher.
Ms Guthrie said attitudes had to change to “become about saving rather than spending.”
Originally published as Australians are under increasing financial stress and are failing to make ends meet