As Australians face a cost-of-living crisis, many are adopting a lockdown budget similar to that imposed during the pandemic in order to survive financially. With the upcoming June quarter CPI figures being crucial to the Reserve Bank’s interest rate decision, the average Australian is making sacrifices to cope with rising living costs.
A new survey by Compare the Market reveals that over three-quarters of Australians are planning to make tough decisions to reduce spending over the next year. This includes socializing less, postponing holidays, and delaying big life events such as marriage and starting a family in a “cost-of-lifestyle lockdown”. While some are making lifestyle changes such as moving to better paying jobs or working remotely to save on transport costs.
The Reserve Bank is encouraging the reduction of spending to combat inflation by putting up interest rates, redirecting income towards loan repayments rather than spending. However, factors such as construction costs, rents, and insurance premiums continue to surge, impacting the cost of living.
As households focus on managing their financial budgets, it is important to find ways to save money beyond simply cutting back on expenses. Putting bills like mortgages, energy, and insurance under the microscope can reveal potential savings. Ultimately, the hope is that these lifestyle sacrifices will help ease the cost-of-living crisis and bring the economy closer to the RBA’s target inflation range.
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