Thirsty Thursday: The point in the week when you actually start earning
The cost of living crunch is leaving Australians with very little money left over once their bills are paid, according to new research by Finder.
Finder analysed the cost of family necessities against the average income to determine how many hours' worth of work everyday expenses cost.
For the average employee earning a $69,400 salary – or $33.68 per hour in post-tax income – simply paying for petrol, groceries and their mortgage costs 28 hours of work each week.
That's equivalent to 75% of the typical 38-hour work week, meaning it is Thursday afternoon for most before they are truly earning.
The average weekly rent of $522 will set tenants back 15.5 hours, but mortgage repayments are even pricier. The average home loan costs $647 a week in repayments, equivalent to 19.2 hours' worth of work.
Childcare costs come in a close second place, costing $565 per week on average. That's equivalent to a staggering 16.8 hours of work – nearly half the typical work week.
The typical grocery bill costs 5 hours of work, while a single tank of petrol will set workers back 3.9 hours of their work week.
Sarah Megginson, money expert at Finder, said many Australians are left with little money once everyday expenses are paid.
"Inflation is soaring and Australians are being hit with hefty costs when they go to fill up their petrol tank or do their weekly grocery shop.
"This is forcing many to quickly change their spending habits."
Over the 12 months to July, the Consumer Price Index rose by 6.1%, with treasurer Jim Chalmers predicting inflation to reach 7.75% by the end of the year.
Megginson said the energy crisis was also driving up electricity bills.
"On top of this, rising interest rates mean that many will start to see their home loan repayments climb by upwards of $7,000 over the course of a year.
"These growing expenses are cutting into households' discretionary income, meaning that more is being spent on necessities. As a result, people have less money left over for luxuries like going out or shopping online."
Petrol costs have risen by 32% year-on-year and Consumer Price Index data shows beef (12%) and vegetables (13%) have also seen steep increases.
Megginson said there are only so many hours employees can work until they need to start digging into their savings.
"Single parents could feel the crunch the most because they need to foot the bill for childcare or school fees without that extra income stream from a partner."
Megginson said sticking to a budget and really monitoring your bills to make sure you're not overpaying are the best ways for households to navigate their finances through this expensive time.
"Australians went through a few months of splurging after COVID-19 lockdowns were removed, but now they're tightening their belts.
"Now is the perfect time to look at your household budget or start one if you haven't already.
"Money management apps like the Finder app let you see all your income and spending in one place, which makes it easier to figure out where you can cut down."
| Item | Average cost | Hours of work | Year-on-year increase in cost (%) | Year-on-year increase in cost ($) | Year-on-year increase in hours |
|---|---|---|---|---|---|
| House deposit (20%) | $165,482 | $4,914.00 | 14.60% | $21,082 | 626.04 |
| Mortgage repayments (weekly) | $649 | $19.30 | 15.00% | $85 | 2.51 |
| Week of childcare | $565 | $16.80 | 4.20% | $23 | 0.68 |
| Rent (weekly) | $522 | $16 | 8.00% | $39 | 1.15 |
| Quarterly energy bill | $320 | $10 | 3.50% | $11 | 0.32 |
| Quarterly gas bill | $181 | 5.4 | 7.40% | $12 | 0.37 |
| Week of groceries | $167 | 5 | 5.30% | $8 | 0.25 |
| Tank of petrol | $131 | 3.9 | 31.60% | $31 | 0.93 |
| Source: Finder, ABS, CoreLogic |
As the cost of living continues to climb, now is the best time to start a budget.
