Young people save, older Aussies travel and dine out

ABC NEWS (Australia)

New analysis of average household spending reveals younger Australians are pulling back on recreational expenses to cover more essential costs like rent. That's while older Australians are able to enjoy more travel and dining out.

Transcript

00:00So we looked at the household spending 10 years ago in the last financial year.

00:06We took control of inflation, so we tried to work out removing that from the effects.

00:12So we sort of really tried to understand what are people spending their money on now compared

00:16to 10 years ago.

00:18So younger people living with parents, not moving out, is that the general trend?

00:23Yeah, well we've seen some real significant changes in that under 25 age group there are

00:28people who are staying with mum and dad for longer, not branching out into the share houses

00:33that we've seen in the past.

00:34And interestingly when we look at the 25 to 34 year age group, they're quite different

00:40to 10 years ago.

00:41So once again we've got much more people living alone, share houses are out of fashion, there's

00:45less people coupling up and less people with children.

00:48And that's sort of a result of cost living pressures changing the way we live our lives.

00:52And I was interested in the knock-on effect of that, in that more furniture is being bought.

00:58Yes, so it's kind of having those households forming a little bit later in life, it's taking

01:04longer to kind of get yourself set up, finish that education, the rent's taking up more

01:09money and making home ownership more challenging and challenging.

01:13Do young people move around more often, I guess partly because they're renting?

01:18Yeah, so the rental market's the tougher one.

01:20You often have those 12 month long leases which come up and people sort of have to move

01:24on.

01:25And also that sort of having more single households makes it more happen.

01:29If you're in a couple with children, often that sort of keeps you tied down.

01:33The childcare, the schools keep you in one place.

01:36But if you don't have those sort of leashes holding you in place, moving more often becomes

01:41easier and easier.

01:42Terry, what about the middle aged group?

01:45Where are their finances going?

01:46Yeah.

01:47And once again, housing, servicing that mortgage is taking up more and more of their income.

01:52They're cutting back on some of those funner things, you know, eating out, going to live

01:56music, gigs, cultural events, just to sort of service those bigger and bigger mortgages

02:00we've seen.

02:01So mortgages are up, but also associated costs like stamp duty have increased quite significantly

02:06over that 10 year period.

02:07And I mentioned the older generation splashing out.

02:11Is that because they may well have paid off a mortgage and are now relying on a pension,

02:17which makes them comfortable and life's good?

02:20Yeah.

02:21So they've got the lowest amount of their expenditure going towards those home loan repayments.

02:25It's sort of half what the younger groups are.

02:27So that's just reflecting those people in 55 to 64 year age group, got the mortgage under

02:32control, got the kids out the door, more disposable income and they're going out and spending more

02:36on food, buying a good bottle of wine to go with dinner.

02:40There's more money going to these recreational goods, which can often mean caravans.

02:44So they're traveling around the country.

02:45They're traveling internationally and domestically via air.

02:49So they're really enjoying themselves while they've got the disposable income and still

02:51healthy enough to get around and do things.

02:54Does the research show trends in lifestyle?

02:58I'm thinking of fitness trends or eating trends.

03:04Are they reflected?

03:06Yeah.

03:07We can definitely see across all the age groups expenditure on dining out and takeaways up

03:12and probably also up a little bit more for that younger group.

03:15And it sort of makes sense when you see there's more of these people living by themselves that

03:19they would all go out to socialize, not in their lounge rooms with their housemates.

03:24But if you're living at own, you go out to the cafes, restaurants to grab a meal.

03:28The other interesting thing is in that younger age group, especially, we've seen more spending

03:32going into that health sector.

03:33And this coincides with other data we've looked at where there's more expenditure on

03:39physiotherapists, other health professionals and mental health professionals, psychologists,

03:45counsellors.

03:46So that younger generation especially is really putting more money into their physical and

03:49mental health.

03:50Terry, I'm interested in who benefits from this research that you've done and who can

03:58use it to look at the future and plan?

04:00Yeah.

04:01And it's sort of for businesses out there trying to pitch their customers, understanding

04:06that as the next sort of wave comes into an age group, their expenditure patterns might

04:10be different.

04:11So it helps businesses understand who should they be targeting?

04:15How are the preferences changing?

04:16Are there different price points people are looking towards?

04:19It's also kind of important for governments to understand that housing affordability, housing

04:25availability is really changing our younger demographic.

04:29It's making them harder to kind of get secure housing.

04:32That creates challenges in maintaining secure employment and also it has knock-on effects

04:36into fertility.

04:38So more expensive housing, more insecure housing just makes it harder for young Australians to

04:44start having their first child or even adding to their family from there.

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