Skating on thin ice: Aussies struggle to keep financial head above water amid rising costs
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In today's uncertain economic climate, the importance of financial security cannot be overstated.
Yet, a recent cost-of-living survey paints a concerning picture for many Australians, revealing a significant portion of the population may be ill-prepared for financial emergencies.
As the cost of living continues to climb, these challenges underscore the urgent need for effective financial strategies and support.
The survey, conducted by the Financial Counsellors Association of Western Australia, found that a staggering 37 per cent of respondents would struggle to cover an unexpected $500 expense, highlighting the precarious financial situation many are facing.
The study gathered insights from 1,074 individuals in July 2024, and the results indicated that nearly four out of 10 people in WA would be forced to borrow, sell belongings, or resort to credit in the face of unforeseen bills.
This alarming statistic underscores the thin financial ice upon which many residents are skating.
Financial Counsellors Association of WA Executive Officer Melanie Hopkinson has noted an unprecedented number of people seeking financial assistance than ever before.
‘[We are seeing] people who have not never reached out to services before,’ she stated.
‘We saw in the report that 51 per cent are cutting back on food or switching to less nutritious food, which obviously has implications.’
‘We see people pulling back on important insurances, and of course, more and more people are really finding it difficult to make ends meet,’ Ms Hopkinson added.
Ms Hopkinson mentioned that when facing financial hardships, people frequently reduce their food expenses to prioritise housing costs, often seeking assistance from agencies or borrowing money for food and medicine.
She also noted that some individuals resorted to costly credit options.
‘Our members are seeing people with up to 10 different buy-now, pay-later, or payday loans, for example,’ Ms Hopkinson said.
‘It's very easy to get stuck in a debt spiral when you turn to those kinds of credit.’
Listeners of ABC Radio Perth shared their personal cost-cutting measures, painting a vivid picture of the sacrifices being made.
‘Many people don't have a spare $500, living pay to pay. Car insurance already cancelled. If your car breaks down, thousands to fix—you're screwed. Can't fix the car, can't work, can't pay the rent. One incident away from disaster,’ one shared.
‘Our cut back is no home or car insurance, no berries until they're under $4 a punnet. No longer shop at the local markets because not all the items are clearly priced, less muscle meat and more offal,’ another reported.
‘I have intolerances with certain foods, and they always seem to be double to similar foods I can't eat. Bread is $7, 2 litres of milk, $6.20. Only buy food on offer but it never seems to be basics and have cut back on meat. I do have a spare $500, thankfully,’ a third lamented.
‘I don't have the money for a deposit for a rental until I get my deposit back from my current rental, so in a month's time, I may be homeless. Most disappointing is the bank I've been with for 40+ years won't give me a small personal loan for that deposit even though I will be able to pay it back as soon as I get my bond back. It's scary how a small financial shock can turn your life into a train wreck,’ someone else said.
‘As a pensioner, I [have] to be very inventive in how I stretch my dollar. I can't afford the “buy two for less” deals either. But what makes me struggle is the cost of the internet, which I have to have as everything is now online,’ a pensioner shared.
Ms Hopkinson stated that although state and federal governments have implemented some cost-of-living relief measures, the association believes additional support is needed for those with low incomes.
‘We really would love to see a cost-of-living package that offers financial assistance across the board to cover the cost of those basics such as housing, utilities and food, and even transport,’ she said.
‘It's so important that people can keep their cars on the road and fully registered.’
She proposed that the state government could expand its rent relief program, which currently offers one-time payments to tenants at risk of eviction due to unpaid rent.
Additionally, Ms Hopkinson suggested broadening the hardship utility grant scheme to include water charges for social housing tenants and extending free public transport for school students to include TAFE students as well.
'It would be great to see an increase in funding for both emergency relief and individual financial counselling services across the state,’ she advised.
‘There's such a huge demand for those services.’
The survey results from the Financial Counsellors Association of WA were corroborated by recent data from the Actuaries Institute, which revealed that 15 per cent of Australian households are having difficulty affording insurance.
In Western Australia, home insurance premiums increased by an average of 19 per cent over the past year, leading many to reconsider their policies.
Financial Counselling Australia Co-Chief Executive Peter Gartland noted that while insurer costs have risen, he encouraged people to compare prices and review their bills if they see a significant increase in premiums.
‘Shop around because really, when there is a claim, it really doesn't matter how many years you've been with an insurer, you're treated no differently,’ he suggested.
‘Consider increasing your excess costs, which will lower the premium.’
‘The other thing to think about also is pay by the month insurance, so long as there's no additional costs attached with that, so you spread the pain over the course of 12 months,’ Mr Gartland added.
As the rising cost of living continues to strain household budgets, a new map sheds light on how Australians are coping with these financial pressures.
While the recent survey highlights the difficulties many face in managing basic expenses, this detailed map provides further insight into the specific ways people across the country are adjusting to the soaring living costs.
Have you faced similar challenges amid the cost-of-living crisis? How have you navigated them? We invite you to share your experiences and strategies for managing unexpected expenses in the comments below.
Yet, a recent cost-of-living survey paints a concerning picture for many Australians, revealing a significant portion of the population may be ill-prepared for financial emergencies.
As the cost of living continues to climb, these challenges underscore the urgent need for effective financial strategies and support.
The survey, conducted by the Financial Counsellors Association of Western Australia, found that a staggering 37 per cent of respondents would struggle to cover an unexpected $500 expense, highlighting the precarious financial situation many are facing.
The study gathered insights from 1,074 individuals in July 2024, and the results indicated that nearly four out of 10 people in WA would be forced to borrow, sell belongings, or resort to credit in the face of unforeseen bills.
This alarming statistic underscores the thin financial ice upon which many residents are skating.
A Western Australia cost-of-living survey revealed that 37 per cent of respondents can't cover a surprise $500 expense without borrowing or selling assets. Credit: Shutterstock
Financial Counsellors Association of WA Executive Officer Melanie Hopkinson has noted an unprecedented number of people seeking financial assistance than ever before.
‘[We are seeing] people who have not never reached out to services before,’ she stated.
‘We saw in the report that 51 per cent are cutting back on food or switching to less nutritious food, which obviously has implications.’
‘We see people pulling back on important insurances, and of course, more and more people are really finding it difficult to make ends meet,’ Ms Hopkinson added.
Ms Hopkinson mentioned that when facing financial hardships, people frequently reduce their food expenses to prioritise housing costs, often seeking assistance from agencies or borrowing money for food and medicine.
She also noted that some individuals resorted to costly credit options.
‘Our members are seeing people with up to 10 different buy-now, pay-later, or payday loans, for example,’ Ms Hopkinson said.
‘It's very easy to get stuck in a debt spiral when you turn to those kinds of credit.’
Listeners of ABC Radio Perth shared their personal cost-cutting measures, painting a vivid picture of the sacrifices being made.
‘Many people don't have a spare $500, living pay to pay. Car insurance already cancelled. If your car breaks down, thousands to fix—you're screwed. Can't fix the car, can't work, can't pay the rent. One incident away from disaster,’ one shared.
‘Our cut back is no home or car insurance, no berries until they're under $4 a punnet. No longer shop at the local markets because not all the items are clearly priced, less muscle meat and more offal,’ another reported.
‘I have intolerances with certain foods, and they always seem to be double to similar foods I can't eat. Bread is $7, 2 litres of milk, $6.20. Only buy food on offer but it never seems to be basics and have cut back on meat. I do have a spare $500, thankfully,’ a third lamented.
‘I don't have the money for a deposit for a rental until I get my deposit back from my current rental, so in a month's time, I may be homeless. Most disappointing is the bank I've been with for 40+ years won't give me a small personal loan for that deposit even though I will be able to pay it back as soon as I get my bond back. It's scary how a small financial shock can turn your life into a train wreck,’ someone else said.
‘As a pensioner, I [have] to be very inventive in how I stretch my dollar. I can't afford the “buy two for less” deals either. But what makes me struggle is the cost of the internet, which I have to have as everything is now online,’ a pensioner shared.
Ms Hopkinson stated that although state and federal governments have implemented some cost-of-living relief measures, the association believes additional support is needed for those with low incomes.
‘We really would love to see a cost-of-living package that offers financial assistance across the board to cover the cost of those basics such as housing, utilities and food, and even transport,’ she said.
‘It's so important that people can keep their cars on the road and fully registered.’
She proposed that the state government could expand its rent relief program, which currently offers one-time payments to tenants at risk of eviction due to unpaid rent.
Additionally, Ms Hopkinson suggested broadening the hardship utility grant scheme to include water charges for social housing tenants and extending free public transport for school students to include TAFE students as well.
'It would be great to see an increase in funding for both emergency relief and individual financial counselling services across the state,’ she advised.
‘There's such a huge demand for those services.’
The survey results from the Financial Counsellors Association of WA were corroborated by recent data from the Actuaries Institute, which revealed that 15 per cent of Australian households are having difficulty affording insurance.
In Western Australia, home insurance premiums increased by an average of 19 per cent over the past year, leading many to reconsider their policies.
Financial Counselling Australia Co-Chief Executive Peter Gartland noted that while insurer costs have risen, he encouraged people to compare prices and review their bills if they see a significant increase in premiums.
‘Shop around because really, when there is a claim, it really doesn't matter how many years you've been with an insurer, you're treated no differently,’ he suggested.
‘Consider increasing your excess costs, which will lower the premium.’
‘The other thing to think about also is pay by the month insurance, so long as there's no additional costs attached with that, so you spread the pain over the course of 12 months,’ Mr Gartland added.
As the rising cost of living continues to strain household budgets, a new map sheds light on how Australians are coping with these financial pressures.
While the recent survey highlights the difficulties many face in managing basic expenses, this detailed map provides further insight into the specific ways people across the country are adjusting to the soaring living costs.
