Australians are making big changes due to the rising cost of living.

Aussies are focussing more on their outgoings, prioritising essentials and cutting back where they can according to a recent report by NAB.

Clearly, the cost of living is steadily rising in Australia and is becoming a key issue for consumers.

Rising inflation has been the key driver, with Australian consumer prices rising by 5.1% over the last year, the largest annual change to CPI since  June 2001 action of the GST lifted headline inflation to 6.1%.

Recently, the Treasurer indicated pressures on households were intensifying and the inflation challenge Australians are worse facing is worsening.

The NAB report showed that 1 in 2 is switching to cheaper brands & shopping around, turning off electrical appliances & lights and making fewer car trips to save petrol.

Over 4 in 10 have cancelled or cut back on food delivery & entertainment, coffees, snacks & lunches.

Encouragingly, 4 in 10 have created or are now following a budget and keeping a better track of their spending according to the NAB report

The top five ways Australians are changing their spending behaviours are:

1. Switching to cheaper brands or shopping around for cheaper products
2. Cancelling/cutting back on food delivery services
3. Cancelling/cutting back on entertainment such as cinema, theatre, etc.
4. Cancelling/cutting back on subscriptions such as newspapers, magazines, audiobooks, apps
5. Cancelling/cutting back on gym, sports, or club memberships

Consumers were however less prepared to cut back their spending on essentials, with the survey showing that only 1 in 10 deliberately missed a rent or mortgage repayment (9%), a bill payment (11%) or cut back mortgage repayments or drawing down equity from loans (12%), and only around 1 in 20 intended to so in these areas - see chart below.

The top five ways Australians are changing their lifestyle behaviours are:

1. Cutting back/turning off electrical appliances/lights
2. Cutting down on car journeys to save on petrol
3. Cutting back/stopping buying micro treats e.g. coffee, snacks, lunches
4. Creating/following a budget/keeping a better track of spending
5. Cancelling/delaying or making more modest holiday plans

Ask for help if you need it

NAB Group Executive for Personal Banking, Rachel Slade, acknowledged that there are some individuals who may be feeling the cost-of-living pressures.

“When we look at our customers, as a whole they are in a really good position right now – in fact 70% are ahead on their mortgage payments giving them financial flexibility.”

“As a bank we’ve never been in a better position to help. The establishment of our NAB Assist team in 2016 together with some smart analytics means that we are able to quickly identify those customers who may need our help so we can get in touch with them.”

“There are many things we can do to help from discussing flexibility around home loan payments to providing tailored budgeting tools. And we are seeing many customers make their own adjustments – 40% of Australians are now creating and following a budget which is brilliant.”

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.