The expenses preventing Aussie households from saving

Food, utility bills and eating out are the top barriers to saving for Australians.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Saving money can be hard. From mortgage repayments to groceries to energy bills, sometimes life's expenses can become barriers to saving, but there are ways to spend less and save more without completely overhauling your life.

Finder conducted a survey of 1,011 Australians to discover the top bills and expenses standing in the way of people saving and to find out which pieces of money advice Australians find the most helpful. We also look at the top ways you can boost your income and cut your expenses without cutting out your favourite things.

How much do Australian households save?

According to the ABS, the average household spends $1,425 per week on essential and non-essential living expenses, with the top expenses being housing costs ($279), food and non-alcoholic beverages ($237), transport ($207) and recreation ($172).

Low-income households dedicate a relatively higher portion of their spending to housing (23%), food and non-alcoholic beverages (19%) and domestic fuel and power (5%), compared to high-income households (18%, 14% and 2% respectively).

The average household earns $2,242 in income per week, leaving around 36% for saving and additional discretionary spending.

According to Finder's Consumer Sentiment Tracker, the average person saves $759 per month and has $29,091 stashed in savings. Generation Z are the biggest savers, putting away 31% of their earnings each month, followed by millennials (22%).

But concerningly, nearly half (49%) of generation Z adults feel negative about their ability to afford a home, followed by 38% of millennials. Additionally, 53% of generation Z and 46% of millennials could survive off their savings for one month or less.

So what's holding Australians back from building their savings?

The top essential expenses preventing Australians from saving

Australians agree that spending on food (47%) and utility bills (45%) are the two major essential expenses standing in the way of their savings, with housing (33%) coming in third place. Finder's Consumer Sentiment Tracker also shows housing (33%), utility bills (22%) and groceries (20%) are the expenses Australians find the most stressful.

Generation Z (67%) are by far the most likely to say spending on food is a barrier to their savings goals, compared to 34% of baby boomers. Meanwhile, millennials (44%) are the most likely to say housing costs are a major barrier, while just 17% of baby boomers agree.

Women (86%) are more worried than men (78%) about the essential expenses standing in the way of their financial futures, with spending on food being their biggest barrier to saving (56% compared to 37%).

The top non-essential expenses preventing Australians from saving

Unfortunately, your Uber Eats and Netflix habits aren't good for your bank account. Australians agree the top non-essential expenses standing in the way of their savings are dining out or ordering food in (44%) and entertainment (35%). According to spending data from the Finder app, the average person spends $429 per month on dining out and $135 per month on food delivery services. The average spend on entertainment is $375 per month.

Baby boomers (54%) are the least likely to say non-essential expenses are a barrier to building their savings, while 89% of millennials and generation Z agree that cutting down on discretionary spending would benefit their financial futures.

Women (51%) are more likely than men (38%) to say spending on restaurants and food delivery is one of their main barriers to saving. On the other hand, overspending on holidays has a bigger impact on savings for men (29%) than for women (20%).

Which pieces of money advice are the most helpful?

Aussies are set on having multiple TV subscription services and they won't hear otherwise. Australians agree the most annoying piece of savings advice is being told to cancel their TV subscription services, with 49% agreeing this irritates them. For generation Z, this figure grows to 56%.

Australia is a nation of binge-watchers – 64% of adults pay for at least one streaming service and 43% pay for two or more accounts. A recent Finder survey also found 44% of Aussies are mooching off their friends' or family members' TV subscription accounts – a great way to save money but perhaps not so great for your loved ones' wallets.

After subscription TV, two in five (38%) Aussies find it annoying to be told to perform their own grooming or beauty service at home. Baby boomers are especially sceptical of this idea, with 50% saying the advice is irritating.

The pieces of money advice Australians find the most helpful when it comes to building savings are to cook at home instead of eating out or ordering delivery (77%), to track their spending (74%), to make their daily coffee at home instead of buying it (73%) and to use coupons to save money on purchases (73%).

How can your everyday spending habits impact your borrowing power?

Planning to apply for finance like a personal loan or mortgage? You might want to take a close look at your day-to-day spending first.

As part of the loan application process, lenders will examine your daily spending habits to determine your borrowing power. Their assessment will take into account how much of your income is left over after your regular financial commitments like bills, rent, credit repayments and groceries.

If you have a penchant for food delivery, streaming subscriptions, buy now pay later purchases or even meal plans, this may reduce your borrowing capacity. While spending across these categories won't necessarily prevent you from getting a loan, it can impact how much a bank is willing to lend to you. After all, this is essentially surplus income that could otherwise go towards paying off your loan.

Unsure whether your spending habits may be impacting your borrowing capacity? You can calculate your borrowing power using one of our personal loan calculators.

Can a daily coffee habit make a difference?

Most Aussies probably aren't considering their financial futures every time they order a latte from their local cafe. For many, it's a daily ritual. But when asked about the implications of a daily brew, 76% of Australians believe buying a coffee a day could be a barrier to building their savings. More than a third (34%) agree this would have a serious impact.

Generation Z are the most likely to blame their daily grind, with 86% believing a caffeine ritual could prevent them from building their savings. Baby boomers (66%), on the other hand, are less inclined to agree that a daily coffee could stand in the way of their financial goals. Women (81%) are also more likely to agree that a daily coffee could impact their future savings than men (71%).

So is a cup of coffee really such a big deal? Buying a $3.50 coffee every day would set you back $1,278 over just one year, so it might be worth reconsidering whether you really need that decaf soy iced latte with extra froth. If you rely on your daily caffeine hit, don't stress – Finder has crunched the numbers and found there are other things Australians could be doing to boost their bank account balances.

How to cut your expenses

Do you have a mortgage? If so, refinancing to a lower interest rate could save you a sizable sum of money. Finder analysis shows reducing your rate from the average variable discounted rate of 3.65% to 3.15% on an average loan size of $495,420 over a 30-year loan term could save you $1,648 per year. Ditching the daily coffee habit could also save you an impressive $1,278 per year.

But if you aren't a homeowner or a coffee-lover, there are still plenty of ways to save. For example, cutting ties with your gym membership could save you $780 per year on average, and skipping two restaurant meals per month by cooking at home instead could pocket you an extra $672 annually.

If you have car insurance, comparing and switching to a better deal could save you $414 per year. Other easy ways to save include shopping for groceries on special ($240), cancelling a streaming subscription ($132) and switching your energy provider ($126).

How to boost your income

Maximising your savings is just as much about income as it is about expenses. If you're looking to overcome the barriers to saving and increase your earnings, why not find a second income stream? Jobs like freelancing, tutoring, working as a food delivery driver or renting out a spare room are typically flexible and able to work around your lifestyle. The most popular side hustles among Australians are selling pre-owned goods (16%) and collecting recyclable cans and bottles (12%), earning hustlers an average of $215 and $46 per month on average.

When it comes to the most financially rewarding side hustles, working as an influencer or brand ambassador earns side hustlers the most, a sizeable $972 per month. If social media isn't your thing, renting out a spare room could still earn you $677 per month on average. This is followed by working in food delivery ($423) and rideshare driving ($418).

How to save money and still have fun

Don't deprive yourself. If you love your daily soy iced mocha with extra froth, then don't give it up! Instead, try to spend more consciously. Figure out how much money you can afford to spend on "fun" things each month, and then appreciate how you choose to spend that money. If you're a movie snob, then don't give up your cinema habit, but decide where else you could be saving – whether that's going on a weekday when tickets are cheaper or giving up an extra takeaway meal to make up for it.

Switch and save where it really counts. Set aside some time once every few months to have a good hard look at your bills, from credit cards to your mobile phone plan, and decide which services you'd be better off switching. If this sounds overwhelming, there are apps available – like the Finder app – that tell you exactly where you could be getting a better deal. Often, new customers get cheaper discounts, while loyal customers get stung with bad deals. Don't be one of the eight million Australians paying the loyalty tax by not switching!

Invest some of your savings. If you're saving for the long-term, it could be worth pouring a portion of your money into an investment account. The low cash rate has made it harder than ever for Aussies to earn interest on the money sitting in their bank accounts. Instead, could you invest some of it in the share market? For beginners, exchange traded funds (ETFs) are a great place to start. Because they are diversified across asset classes and composed of a large portfolio of companies, they are less risky than individual stocks. Just remember to keep a decent chunk of your savings in an account that's easy to access for a rainy day.

  1. Finder Consumer Sentiment Tracker

  2. Australian Bureau of Statistics (ABS)
  3. Reserve Bank of Australia (RBA)
  4. Australian Competition and Consumer Commission (ACCC)

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site