With the cost of living in Australia on the rise, it is time for you to ask yourself how you are coping with the pressures to your household budget.’
ME Bank’s latest Household Financial Comfort Index discovered that many people are moving away from discretionary purchases and instead focusing their attention on buying essential items.
Of those questioned, 63 per cent of households said they are either somewhat or very comfortable with their monthly expenses, while 22 per cent are somewhat or very uncomfortable.
With the cost of everyday items increasing, this is a consideration that people throughout the country need to factor into their financial planning.
Presuming that costs will stay the same for years to come could put your budget under considerable strain – a financial advisor will be able to offer guidance on how to take this into account.
Jamie McPhee, chief executive officer of ME Bank, explained: “There is greater household concern about how rising costs of necessities influence their ability to save or have money left over for discretionary spending or an emergency; not their ability to manage expenses.”
He revealed that there has also been a growing trend of people hoping to pay down their debts and make additional contributions to retirement superannuation.
Other findings from the report show that Australian households are currently experiencing moderate levels of financial comfort – 5.29 out of ten – which represents a fall from the June 2012 report.
This was primarily due to a decline in financial comfort among households with children.
Retirees showcased the highest level of comfort with a rating of 6.08 out of ten, which represents a four per cent rise from June last year.
Analysts believe this is because people are becoming more accustomed to their investments thanks to a rebound in the share market – self-funded retirees had a rating of 7.55 on the index.
There were some discrepancies in financial comfort levels across the country – there was some recovery in South Australia and New South Wales, although Western Australia and the Australian Capital Territory had the highest ratings.
Tasmanians, on the other hand, have apparently got the lowest levels of financial comfort in the country.
There are steps that everyone can take to improve their prospects, such as enlisting the help of a financial planning advisor.
Your situation can be independently assessed, before guidance is offered on what you can do to maximise your money and ensure you remain comfortable for many years to come.