4 Comparisons on Household Spending

Over the last few years, I've developed a keen interest in how I spend my money - I do lots of year on year comparisons, and analyse how my spending is impacted by lifestyle changes. You may recall a few weeks ago I introduced the neat little app I found on the MoneySmart site, TrackMySpend, that along with capturing daily expenses, prompts you to identify whether the purchase is a want or need.

I’ve just came across some more interesting information on the MoneySmart site about Australian Spending Habits, which is based on ABS data from a 2009/10 Household Expenditure Survey. Whilst I encourage you to check out MoneySmart's beautiful graphic presentation, below is a summary of three sets of information which I find a little surprising:

1.  Category comparisons:

  • Australian's spend $14.1B on alcohol, versus $1.1B on tea/coffee per year
  • Australian's spend $78.4B on cars, versus $2.2B on public transport per year
  • Australian's spend $8.0B on beauty, versus $2.0B on education per year
  • Australian's spend $9.5B on gadgets, versus $5.1B on fashion per year
Coffee - 150
Coffee - 150

What's curious to me is not that the former categories are greater than the second categories, but the degree to which they are greater – I know that we like our alcohol, but when I see multiple queues of people across Sydney lining up at all times of day to collect their soy lattes, I’m a little surprised that we spend nearly 1200% more on alcohol than we do on tea and coffee.

That massive 76.4B gap in cars versus public transport indicates not only do we spend an awesome amount on our cars, but that we also use them in preference to public transport. What I'd like to get now is an additional comparison between the associated costs of owning a care (petrol, service/repairs, parking, tolls, insurance) and the $2.2B on public transport. BTW, we actually spend more on seafood ($2.4B) than we do on public transport!

That we spend more on gadgets than fashion completely speaks to me - having bought my iPhone and iPad last year, after housing and food - I wouldn't be surprised to learn if smart phone apps are the next biggest spend - well ahead of clothes anyway.

2. State by State Comparison

Perhaps I'm a little Sydney centric, but was very surprised to learn than household spending in NSW actually ranks 4th in the country.

  • ACT - $1,536
  • NT - $1,500
  • WA - $1,285
  • NSW - $1,265
  • QLD - $1,241
  • VIC - $1,225
  • TAS - $1,064
  • SA - $1,044

3. Average Weekly Household Cost comparisons:

  • $52 holidays
  • $32 restaurant meals
  • $20 health practitioners
  • $9 on Books/Newspapers
  • $7 on shoes

These are average costs, and make a lot more sense when you look at the annualised value of the categories – eg that $52 per week translates to an annual holiday cost of $2,704. That restaurant figure at $32 is low, clearly not a weekly event for the average house - though PLEASE let me know if you're aware of a restaurant that can feed 2 or more people for $32.

4.  Housing cost comparisons:

  • $278 - Single person under 35
  • $360 - Couple (ref person under 35)
  • $364 - Couple with kids (under 5)
  • $325 - Couple with kids (eldest between 5-14)
  • $242 - Couple with kids (eldest between 14-24)

Do you notice what happens - housing costs come down as the children get older. Is it because families move to the suburbs, cease renovations or rapidly pay down their mortgage? Regardless, it's just as well housing costs fall because as children get older, there's an often steep rise in all other costs (including alcohol). Another side-fact - in Tasmania, they spend more on more on transport than they do on housing - though I understand their railway system is, aahm, modest.

These are just a few pop-facts on how we spend money - and I'd encourage you to check out the MoneySmart page for more information. As with most information on this site, it is a great research tool for those who are interested in improving their relationship with money.

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References:

Moneysmart webpage: www.moneysmart.gov.au/managing-my-money/budgeting/spending/australian-spending-habits

IBIS World source site: www.ibisworld.com.au