Young Australians who have recently left home have taken “the hardest hit” when it comes to spending cutbacks, according to a new report which analyses how the cost-of-living crunch is changing how we spend often dwindling pools of cash.
The data from CommBank iQ showed Australians are having to increase their expenditure on essentials such as insurance, medical costs and pharmacies, leaving less room to spend on discretionary categories like household goods and clothing.
Travel and entertainment spending were the only discretionary categories to record above-inflation growth, 8.2 per cent and 8.6 per cent respectively.
READ MORE: One in five women going without shampoo, body wash due to cost
The picture of spending across the population varied significantly with age.
People under 40 are more impacted, while older Australians are more comfortable.
Of all age groups, it was 25- to 29-year-olds who adjusted their spending most.
For this group, often facing rental costs for the first time after leaving home, spending slumped by 5.1 per cent, more than 10 per cent when considering inflation.
But despite a pullback in discretionary purchases, 20-somethings continued to find room in their stretched budgets for entertainment experiences, up 13 per cent.
The “Barbenheimer” effect – named for the duelling releases of blockbuster films Barbie and Oppenheimer – saw cinema purchases up 31 per cent, led by under-30s, while spend on ticketed events, such as concerts and sport, climbed 18 per cent.
READ MORE: Families expected to spend less this Christmas, data reveals
Every action has a reaction.
In stumping up more cash for fun, the report found 25- to 29-year-olds decreased spending on household goods by 17 per cent, clothing 10 per cent and retail services by 9 per cent.
People over 65 increased spending on travel, up 17 per cent, and eating out, up 11 per cent.
The report used spending data for the September 2023 quarter compared to the same period last year.
