Latest CommBank iQ Cost of Living Insights Report shows spending falling for younger Australians with those in their twenties hardest hit.
Australians continue to prioritise spending on travel and entertainment despite feeling ongoing pressure from rising living costs, according to the latest CommBank iQ Cost of Living Insights Report.
The report shows quarterly spending by Australians on essential goods and services rose, but well below inflation, while overall discretionary spending was flat.
Australians are increasing their expenditure on essentials such as insurance, medical costs and pharmacies, leaving less room to spend on discretionary categories like household goods and clothing. Travel and entertainment spending were the only discretionary categories to record above-inflation growth (8.2 per cent and 8.6 per cent respectively) – compared to an 8.1 per cent decrease in households good spending.
According to the report, 25-29 year olds have been the hardest hit with a 5.1 per cent decline in their total spending – the only age group to decrease both discretionary and essential spending. Despite a pullback in discretionary purchases, those in their twenties continued to find room in the budget for entertainment experiences (up 13 per cent).
“Leaving room in the budget for experiences is a continuing trend. However, they are having to reduce spending in other areas,” said CommBank iQ Head of Innovation and Analytics Wade Tubman.
“We’re seeing consumers in their twenties cut back spending but still leave room to fund experiences. We’ve also seen younger people redirecting discretionary spending from things like clothes and homewares, to spend on cinemas and ticketed events such as concerts and sport.”
The report uses spending data for the September 2023 quarter compared to the same period in 2022 and paints a picture of spending at an individual level. The latest results confirm that, despite interest rates remaining on hold through the period, many Australians are feeling more pressure from rising living costs.
“Given the most recent rate rise, it will be interesting to continue to monitor these tr