Aussies predict the cost of living will NOT get any easier in 2023

The past few years have been particularly hard on Aussies when it comes to finances. Interest rates have risen to unprecedented levels, putting strain on individuals, homeowners and renters alike. Rent has rapidly risen, and grocery prices have also skyrocketed.

As a result, the majority of Aussies are worried about the state of their finances heading into the new year - this is especially true for many of our members who are relying on their pensions.



Unfortunately, the situation isn't expected to improve in the foreseeable future either - this sobering reality was backed up by a recent Canstar Consumer Pulse Report, which surveyed 2157 Australians across age groups and states/territories nationwide.

It found that most Aussies don't anticipate any relief from the high cost of living hitting them next year.


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As 2023 approaches, most Aussies are preparing for higher living expenses. Credit: Pexels/Karolina Grabowska.



The new study conducted by Canstar found that cost of living expenses such as electricity, petrol, groceries, and bills are the biggest source of anxiety among the general population.

The findings indicated that putting food on the table is the number one financial concern among Australian consumers, as the price of groceries remains the most significant worry for 18 per cent of respondents.

This number has increased more than twice since Canstar's first consumer study five years ago, in which only 7 per cent of Australians cited groceries as a top concern.



Almost two-thirds of the survey respondents reported that they spend more on their weekly grocery shopping.

On the other hand, only 7 per cent said that their spending had stayed the same, but they're already buying less food. Some have even managed to cut their spending down by purchasing cheaper cuts of meat or opting for supermarket-brand items.

In addition to groceries and energy, rising petrol prices were also a major concern. More than half of the respondents said that they'd experienced an increase of $31 in their monthly energy bill, resulting in an added expense of $188 for the year.

Canstar revealed that despite this, over a quarter of respondents were able to maintain or increase their savings rate from the previous year.


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Many Aussies said they had to take money out of their savings to make ends meet. Credit: Unsplash/Towfiqu barbhuiya.



Canstar Group's Finance Expert, Steve Mickenbecker, said that while the Reserve Bank (RBA) predicted that inflation would start dropping next year, Aussies aren’t buying it.

'The Reserve Bank expects inflation to peak at over 8 per cent in December - a number that, if sustained, could do severe damage to the economy and people's living standards for quite a while to come,' Mickenbecker said.

'It would also mean further home loan interest rate rises into the future, which will be particularly damaging to potential first home buyers.'



After the RBA raised the cash rate for the eighth consecutive month last week, Mickenbecker predicts that interest rates might rise to 3.85 per cent in 2023. However, 39 per cent of homeowners and 27 per cent of investors say they are not prepared for these rates.
Key Takeaways

  • Australians are most concerned about the continuing cost of living pressures and skyrocketing living expenses heading into 2023.
  • Putting food on the table is the number one financial worry for next year, as the price of groceries remains the biggest worry for 18 per cent of Aussies.
  • Increasing energy and petrol prices, as well as dipping into savings to keep up with these costs, are additional causes for concern.
  • Respondents reportedly have 'no confidence' that the Reserve Bank of Australia (RBA) will be able to ease inflation or cost of living pressures.
We hope you find the information in this article helpful! For more tips and advice on how to stay on top of your financial game, feel free to check out the Money Saving Hacks forum on the SDC website.
 
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Living in within your means and not trying to keep up with the joneses helps a lot also, when i bought my house around 35-40 years ago the interest rate was 19.5%.
Those were hard times for me. I was a stay at home mum with two boys. My husband was well paid and a large chunk of his income went on the mortgage.
I became expert at stretching a dollar, and still rarely waste money.
 
I am worried about electricity prices, food and rent. Doesn't leave much in the pension after these. I have to run air conditioning because of my lungs in the heat of summer and am trying to stop that, but it is hard.
 

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