The Effects of the Rising Cost of Living on Young Australians
Last year, a 165 gram bag of Kettle chilli-flavoured chips from Coles cost Australians only $4. Now, it’s costing them $6.
A 3 litre bottle of Devondale full cream milk now costs $1.10 more than it did exactly one year ago.
A basket consisting of butter, milk, bread, Vegemite and cheese slices currently puts Aussies back $31.
Now, after looking at the examples above, it is clearly obvious that there is a current cost of living crisis ongoing in Australia. Currently, Australia’s inflation rate has soared to a high of 7% and everyone has felt it in their wallet. A recent study conducted by Suncorp found that 47% of Australians admit that they can’t afford to fill their trolley with groceries in our current economic climate. Additionally, four in five Aussies are actively trying to reduce their spending on food and other essential products. In response, I want to ask three questions:
Why have we been priced out of essential needs?
Well, firstly, let’s start from 2021. Global inflationary pressures related to COVID-19 and the build-up towards the Russo-Ukrainian War began building in mid-2021, and accelerated after Russia's invasion of Ukraine in 2022. As a result of these factors, consumers in the UK and the US felt the financial pressure of higher petrol, as well as food and electricity prices.
Australia was next in the firing line. The same factors caused inflation to build and build since late 2021. In response, the Reserve Bank of Australia implemented one of the most aggressive interest rate tightening cycles in history. However, this was a rather irrational act, as inflationary pressures still persist. Consequently, this mulishly high inflation has caused low wage growth and has decreased real incomes in Australia. In reaction, economists from ANZ say that high interest rates are set to stay high for a while.
Kindly put, they are saying to think twice before you make purchases.
Moreover, amidst high inflation and low growth in wages, a mixture of record net migration numbers and a contemporary housing crisis has added to the ongoing incineration of our cost of living, putting millions of Australians under strong financial pressure.
How has the rising cost of living affected young Australians?
For many young Australians, cost-of-living pressures remain intense. Simply put, young Australians are not well-equipped enough to deal with the factors of rising inflation, low wage growth, a housing crisis, and job insecurity.
At least 70 per cent of young Austalians currently experience financial stress, especially those renting or raising children of their own. Additionally, according to research from Plan International, almost two-thirds of young women are now struggling to afford period products. A survey conducted in April revealed that 57% of women born after 1980 reported that it was increasingly difficult to purchase these products in 2022 when compared to previous years.
However, the biggest blow from the rising cost of living to most young Australians reading this, is the 7.1 per cent indexation rise in HECS-HELP balances, which occurred in June this year. If you are graduating this year from a degree that costs $30,000, indexation will add an extra $2,100 to your debt.
What can we do to curb the rising cost of living?
Financial advisors have sought out techniques for Australians feeling the squeeze. Here are some successful methods that have worked so far:
In regards to food, make a shopping list and stick to it. Buy in season and on special. Plan your meals and don't be loyal to brands. Avoid recipes that require special ingredients, especially if you're not going to use up the rest. Reduce your monthly groceries by looking in your fridge, freezer and pantry. What can be turned into a meal?
For those who drive, use fuel-lock apps, and apps that alert you to cheap prices in your area. There are numerous offers that shave cents off your price per litre when you fill-up. 7-11, Flybuys for Shell, and Everyday Rewards for Ampol are some that come to mind.
Lastly, for those renting or living away from home, you can be saving a lot when it comes to utilities and insurance. Providers know that most Aussies are in the rough, so don’t be afraid to ring them for a better deal. If they don’t give it to you, then move to another provider that will.
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
Last year, a 165 gram bag of Kettle chilli-flavoured chips from Coles cost Australians only $4. Now, it’s costing them $6.
A 3 litre bottle of Devondale full cream milk now costs $1.10 more than it did exactly one year ago.
A basket consisting of butter, milk, bread, Vegemite and cheese slices currently puts Aussies back $31.
Now, after looking at the examples above, it is clearly obvious that there is a current cost of living crisis ongoing in Australia. Currently, Australia’s inflation rate has soared to a high of 7% and everyone has felt it in their wallet. A recent study conducted by Suncorp found that 47% of Australians admit that they can’t afford to fill their trolley with groceries in our current economic climate. Additionally, four in five Aussies are actively trying to reduce their spending on food and other essential products. In response, I want to ask three questions:
Why have we been priced out of essential needs?
Well, firstly, let’s start from 2021. Global inflationary pressures related to COVID-19 and the build-up towards the Russo-Ukrainian War began building in mid-2021, and accelerated after Russia's invasion of Ukraine in 2022. As a result of these factors, consumers in the UK and the US felt the financial pressure of higher petrol, as well as food and electricity prices.
Australia was next in the firing line. The same factors caused inflation to build and build since late 2021. In response, the Reserve Bank of Australia implemented one of the most aggressive interest rate tightening cycles in history. However, this was a rather irrational act, as inflationary pressures still persist. Consequently, this mulishly high inflation has caused low wage growth and has decreased real incomes in Australia. In reaction, economists from ANZ say that high interest rates are set to stay high for a while.
Kindly put, they are saying to think twice before you make purchases.
Moreover, amidst high inflation and low growth in wages, a mixture of record net migration numbers and a contemporary housing crisis has added to the ongoing incineration of our cost of living, putting millions of Australians under strong financial pressure.
How has the rising cost of living affected young Australians?
For many young Australians, cost-of-living pressures remain intense. Simply put, young Australians are not well-equipped enough to deal with the factors of rising inflation, low wage growth, a housing crisis, and job insecurity.
At least 70 per cent of young Austalians currently experience financial stress, especially those renting or raising children of their own. Additionally, according to research from Plan International, almost two-thirds of young women are now struggling to afford period products. A survey conducted in April revealed that 57% of women born after 1980 reported that it was increasingly difficult to purchase these products in 2022 when compared to previous years.
However, the biggest blow from the rising cost of living to most young Australians reading this, is the 7.1 per cent indexation rise in HECS-HELP balances, which occurred in June this year. If you are graduating this year from a degree that costs $30,000, indexation will add an extra $2,100 to your debt.
What can we do to curb the rising cost of living?
Financial advisors have sought out techniques for Australians feeling the squeeze. Here are some successful methods that have worked so far:
In regards to food, make a shopping list and stick to it. Buy in season and on special. Plan your meals and don't be loyal to brands. Avoid recipes that require special ingredients, especially if you're not going to use up the rest. Reduce your monthly groceries by looking in your fridge, freezer and pantry. What can be turned into a meal?
For those who drive, use fuel-lock apps, and apps that alert you to cheap prices in your area. There are numerous offers that shave cents off your price per litre when you fill-up. 7-11, Flybuys for Shell, and Everyday Rewards for Ampol are some that come to mind.
Lastly, for those renting or living away from home, you can be saving a lot when it comes to utilities and insurance. Providers know that most Aussies are in the rough, so don’t be afraid to ring them for a better deal. If they don’t give it to you, then move to another provider that will.
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
