Australia as a developed economy has developed a consumer culture encouraging low rates of saving and high rates of spending. This is a fluid behavior that has been transitioning further towards spending and away from savings over the last fifty years.
The Stats:
Australian enjoyed an average savings rate of 9.47% over the last fifty years, peaking at 20.4% in 1973 and currently resting at only 2.3%, the trend has consistently fallen with the exception of the onset of the Global Financial Crisis from which the panic renewed the compulsion to save.
So as an individual how does this relate to you:
On a subconscious level you are encouraged to spend and without careful attention you likely do not realise that you have been consistently spending more than you need too. Think back to when you were a young adult, a student, apprentice, young family, what was your income like and how did you get by. The truth is we all slowly adjust our lifestyle as we gain the resources to do so, we buy new cars, upgrade the house, keep the phone for less years than we should, dine out more, haggle over prices less, splash out for our kids and so on.
Each expense in isolation may feel entirely justified and warranted given how hard you work, and those future plans will be resolved eventually.
Your expenses like most Australians likely fall into a similar breakdown:
Housing /
Accommodation 23%
Utilities 4%
Groceries and Household items 22%
Clothing 4%
Medical and Wellbeing 7%
Alcohol 2%
Vehicles and Transport 20%
Entertainment 18%
Budget and cashflow management is not always about cutting down your lifestyle but instead about understanding where your money goes, is this maximizing your happiness and needs and in all facets of your life does better value exist for you.
If you would like to discuss this further and take a magnifying glass to your life we welcome your call.