A majority of Australians are concerned about inflation and are making drastic changes to the way they spend and save money, according to new research by consumer intelligence platform Toluna.
While 94% of Australians were found to be concerned about inflation, it’s the younger ones who were most impacted, with 75% of 18- to 34-year-olds worried about mortgage repayments, 18% seeking additional income, and 16% selling personal items to increase cash flow.
Rising inflation was impacting how 82% of Australians spend money, with many putting off spending on less urgent items, such as upgrading tech devices (20%), home repairs and renovations (20%), and buying major appliances (18%). Some 25% stock up on certain items before prices increase further.
Australians were also trimming budgets by cancelling home entertainment subscriptions for services like Netflix or Spotify (12%), reducing their mobile phone plans (11%), and cancelling their landline service (5%). There were also those who have reduced insurance coverage to lower fees for health insurance, home insurance, and life insurance policies (10%), and those who have reduced how much they’re paying down credit cards (7%) and paying off student loans (4%).
Many Australians were also opting to spend more time at home despite the easing of COVID restrictions due to the rising cost of living. Some 23% of Australians have cancelled or delayed travel plans and 69% were more likely to prepare meals at home than dine out. Coffee is another expense Australians scrimp on, with 27% of Australians reducing the amount they spend on buying takeaway coffees, the Toluna study found.
Costs are increasing so much that 10% Australians have sought an additional form of income. Data showed that 18% of 18-34-year-olds and 13% of 35-54-year-olds were seeking additional forms of income. Some 13% of Australians have even turned to selling personal items to make extra cash, while 12% have sold investments to boost cash flow.
Due to the recent interest rate hikes, 58% of Australians were concerned about their mortgage payments, with the younger generations – who have typically paid down less of their mortgages – were more concerned about surging interest rates. Some 82% of 18- to 34-year-olds were concerned about mortgage repayments, compared with 73% of 35- to 54-year-olds, and only 28% of over 55s.
According to the research, 32% of respondents were either actively trying to refinance or will try to refinance within the next six months. This goes up to 56% for those between 18-34 years, and 42% for those between 35-54 years, the study found.
Meanwhile, inflation has pushed 9% Australians to shelve plans to buy a home altogether. This increases to 13% of 18- to 34-year-olds, and 11% of 35- to 54-year-olds.
With inflation and the cost of petrol skyrocketing, 33% of Australians were actively reducing how much they drive. Others were looking to permanently avoid petrol costs by planning their next car to run on alternative energy (26%), such as a hybrid or electric vehicle. Rising costs have also resulted in 16% of Australians putting off their plans to buy a new vehicle, while 14% were delaying spending on their car’s general maintenance and repairs.
“Our research shows that consumers are truly feeling the pinch of rising inflation,” said Sej Patel, country director, Toluna, Australia & New Zealand. “Australians are doing everything they can to cut back and financially safeguard themselves as much as possible – delaying travel, driving less, eating in, and putting off any unnecessary spending. With consumers cutting spending at every turn, businesses must identify ways to demonstrate value in order to retain customers. In this economic climate, price is the number-one factor when it comes to purchasing decisions right now. However, brands and retailers cannot forget that Australians are also now shopping more consciously than ever before and taking the time to research where brands stand on ethical matters. Along with value for money, brands should continue to communicate what they stand for in order to attract and retain their core customers.”