‘Like lockdown’: Aussies reveal how cost-of-living crisis is hitting household budgets

The cost-of-living crisis is forcing Aussies to rein in their spending, but a worrying number say they haven’t been able to due to rising costs.

Whichever way you cut it, Aussie households are under incredible stress at the moment.

While the Reserve Bank last month decided to officially keep interest rates on hold at 4.35 per cent, economists have warned that we are teetering on a “knife’s edge” when it comes to entering a recession, with consumer confidence in the toilet and many (at least those who are lucky enough to have some) dipping into their savings.

Now in a survey conducted by Pepper Money of more than 5000 news.com.au readers, Aussies how they’re coping with the current cost-or-living crisis, with the majority forced to adjust their household budgets.

More than half of respondents, 59.4 per cent, said they have had to make changes, with 29.7 per cent answering that they had been unable to spend less because everything had become too expensive.

Most Aussies are more conscious of their household budgets and have made changes, but many still say they have struggled to rein in their spending.

Almost a third (29.4 per cent) of people said they’ve made a big effort to spend less and save more, while 30.4 per cent of survey respondents have been more aware of their spending without making big significant changes.

Only 10.6 per cent of Aussies surveyed said they hadn’t made any changes to their budget as a result of the cost of living crisis.

Groceries and mortgage payments top the list of household expenses

Consecutive interest rate hikes have made a lasting impact on the household budgets of homeowning Australians, with 23.2 per cent of survey respondents confirming their mortgage is the biggest drain on their finances.

Many who haven’t yet cracked the property market have “pressed pause on their property dreams”, Pepper Money chief executive Mario Rehayem said.

“Around one in four (24.4%) Australians polled in our survey who don’t own a home but are working towards it, say another rate rise from the RBA will likely cause them to put off buying a home in the next 12 months,” he said.

“Unsurprisingly, there’s a feeling out there among hopeful homeowners of despair since the cost-of- living crisis hit. Around 1 in 4 participants (28.6%) said they aspire to own their own home but think they will be priced out or have given up on the quest for home ownership altogether.”

Another 23.7 per cent listed groceries as the sting in the tail of the current cost-of-living crisis.

“I’ve started buying cheap produce from the Vietnamese grocer down the street, and making veggie stir-fries to last the week,” says Alex, a freelance writer from Sydney.

“As a freelancer, I have always been diligent about putting two thirds of every pay aside for mortgage and bills and tax and emergencies, but now it’s more like three quarters because all those costs have crept up.

“Still, I find myself forced to dip into that ‘put aside’ money for the basics of living, so I constantly feel like I am living from invoice to invoice. It’s scary.”

Natalie, a mother-of-two, says the eye-watering increase in grocery costs has forced her to make changes to the weekly menu.

“I’m now making the kids eggs on toast for dinner at least once a week because I simply refuse to pay any more for groceries,” she says.

“I am already paying through the nose, but nice meals are just another added cost.”

Aussies have cited mortgage payments and groceries as their biggest expenses. Picture: NCA NewsWire / Max Mason-Hubers

People living ‘like we’re in lockdown all over again’ due to crisis

Morgan, a software developer from Melbourne, says he’s tackled the increase in household costs by choosing to stay home rather than engage in costly entertainment like meals out or other outings.

“It’s so grim,” he explains, “we all suffered through months of lockdown due to the pandemic, only to come out of it and be too poor to go out anyway.

“My girlfriend is baking her own bread and we’re staying in to watch telly on Saturday nights; we may as well be back in lockdown.”

It’s a trend borne out by the data; 33.1 per cent of survey respondents said they’d cut back on eating out and takeaway to combat the cost of living crisis, while 18.2 per cent had stopped going out for entertainment.

Other answers to the question of how they’ve cut back to save money were varied, ranging from cancelling holidays (five per cent) to selling cars.

It’s another thing freelancer Alex says she’s considering.

“I’m barely using my car, it’s either public transport or walking everywhere,” she says.

“I’m considering selling it and buying something smaller and less gas-guzzler, but even the most basic cars are so expensive now that I’m not sure it would work out any cheaper after all the costs of doing it up for the sale.

“It just feels so scary and uncertain to do anything.”