Key takeaways
54% of Australians have cut back on life's luxuries due to affordability concerns
Eating at high end restaurants, and buying expensive alcohol are on the chopping block
Australians are going without everything from prosecco to private health insurance as cost of living pressures persist, according to new research by Finder.
Their survey of 1,012 respondents revealed more than 1 in 2 (54%) – equivalent to more than 11 million people – admit the cost of living has had a negative impact on their lifestyle.
The research found 1 in 3 (33%) have cut back on eating at high end restaurants, while 27% have gone without drinking expensive alcohol to curb their spending.
One in four (25%) have stopped staying at five-star hotels, while the same proportion (25%) no longer buy designer clothes as living costs bite.
Cutting back on beauty treatments (21%), downgrading travel (16%), and sacrificing gym memberships (15%) are other luxuries Australians are giving up for the sake of their bank account.
But it’s not just luxuries on the line – a whopping 8% have downgraded from gold private health insurance to a lower tier to combat rising expenses.
Sarah Megginson, personal finance expert at Finder, said rising prices and interest rates are forcing Aussies to change how they live.
“Prices of nearly everything are far higher than before the pandemic and some are having to make drastic lifestyle changes to cope.
“Aussies have been forced to become more budget-conscious with their spending habits and little luxuries they once enjoyed are now on the chopping block.”
Gen Z (69%) and gen Y (66%) were more likely to say they’ve made sacrifices to cope with financial pressures than gen X (48%) and baby boomers (36%).
Megginson said cutting back on luxuries is the definition of a ‘champagne problem’, while many households are struggling to afford food and rent.
“There’s a much more harsh reality for some people than cutting out their weekly pamper sessions.
“Now more than ever, it’s crucial to direct any lifestyle savings to a high interest savings account.
“Savings rates have increased significantly over the past two years and savers are getting much more bang for their buck.
“If you create a savings habit during tough times, even if it’s as little as saving $5 a week, you’re much more likely to continue those good habits in the future, which could add up to serious wealth down the track,” Megginson said.
