Soaring cost of living will mean cutbacks
Almost 1 in 5 will have to reduce their grocery shop
2 May 2023
- 94 per cent of people are concerned about paying their fixed living expenses
- Eating out, take away and entertainment would be the first to go in cutbacks
- 18 per cent of people would have to cutback on grocery shopping
- If today’s 0.25 percentage point increase in the cash rate is passed on by banks, it will add $92 to monthly repayments on a $600,000 mortgage, meaning that mortgage holders have paid an extra $14,196 in repayments since rate increases started in May 2022, than they otherwise would have done
- The average variable of interest rate was 6.12% before this decision, and the lowest variable rate in the Mozo database was 4.95%
Tuesday 2 May 2023: With the Reserve Bank of Australia opting to raise its official rate 0.25 percentage points again today, the cost of living for many just went up another hundred bucks or so.
Research by comparison site Mozo shows that a whopping 94 per cent of us were already worried about keeping up with paying for the essentials of life, such as utilities, insurance, phones and internet, and groceries. Within that, more than half of us are very concerned we are going to struggle to get by. And that just got harder!
Mozo’s consumer expert, AJ Duncanson, said, ‘our survey shows that a majority of us are finding it difficult to make ends meet. Inflation has slowed, but mums and dads are suffering’.
Mozo also investigated where the cutbacks are going to be, as the cost of living and interest rate noose gets tighter. Mozo’s Duncanson said, ‘perhaps it is easy to think we are doing ok if the things you would have to cut back on are getting someone else to cook for you, or entertainment, but our survey shows that nearly 1 in 5 of us (18 per cent) would have to reduce our grocery shopping. That is serious, and something the Treasurer needs to be thinking carefully about in his budget next week’.
Peter Marshall, Mozo’s finance expert said, ‘what this shows is that we all need to make sure we are looking after every dollar we can, to protect our families. The mortgage, loan, and insurance markets are competitive right now. And for those of us that can save, there are some excellent rates in that market too.
‘I would say it is worth everyone doing the comparisons on mozo.com.au, and using our calculators. A bit of digital shoe leather could give you some real peace of mind.’
When asked by Mozo whether they were concerned about not being able to keep up with the rising costs of fixed expenses (electricity bill, home insurance, mobile, internet, grocery etc) people said:
|Yes, I am extremely concerned and will not be able pay all these expenses
|Yes, I am very concerned and I will struggle pay them
|Yes, I am somewhat concerned but I will manage pay them all
|No, I am not concerned about the rising prices, I will be able to afford it
When asked by Mozo what would be the first three things they would cut back on if you had to, people said:
|Paid for television
Notes: Rates correct as at 2 May 2023
Vanessa Puli: email@example.com 0416623377
Mozo compares more than 1,800 products from over 200 banking, insurance, energy, and broadband providers to help thousands of Australians find a better deal each month via its award-winning comparison tools and calculators. As one of the most visited comparison sites in Australia, our team of experts routinely provides financial commentary and advice for major news outlets in Australia. Mozo is part of Future plc, an international media group, and leading digital publisher.