How much does the average family spend in Australia?

When we talk with clients about their spending, clients often ask "is this normal?".

Of course we know, there is no such thing as 'normal' because each family is different (different number of family members, different goals, different incomes etc.) however using a snapshot of our data, we can talk about averages.

Our data reveals, the following average expenses per annum:

• Fixed Bills: $58,498

• Home Repayments or Rent: $46,904

• Variable Bills: $23,339

• Discretionary Expenses: $28,045

• Holidays and Travel: $11,650

The average family is also able to save $45,705 per annum.

So, what does each category mean:

• Fixed Bills: Fixed bills are those that you are unable to live without and/or unable to limit your expenditure much in this area.
  

• Variable Bills: Variable bills are those that are important however you have discretion in terms of how much you spend in these areas.
  

• Discretionary Expenses: Discretionary expenses provide you with enjoyment however are not necessities, and could theoretically be reduced the most if required.

  
  

• Surplus / Savings: This is the amount that you can build up in savings each year, make additional home loan repayments or invest.

On a percentage basis, we note that clients are allocating their after tax income in the following manner:

We note that averages can distort the picture. For instance, retirees that have paid off their home loan no longer pay any mortgage repayments and therefore it significantly brings down the average from $58,630 p.a. to $46,904 p.a. Therefore, the following graph also shows the dispersion of clients across the different expense areas:

So, why does this all matter?

• Knowledge is power. If you are trying to save more or benchmark your families expenditure against others, it is possible. For example, if you are unsure if you are overspending on discretionary expenses, you can visually see what most other families are spending, and try and adjust accordingly.
  

• Cashflow is the most important lever for building wealth. As a very general rule of them, and using the data above, you should be aiming to hit a 20% savings rate. However, determining the exact percentage you need to save typically involves quantifying the costs of your future goals, then doing projections to determine what is required to achieve them.

If you want to cut back on your spending, but don't know where to start, here are some of our top tips:

Category	Tips
Home Mortgage	Is your interest rate among the most competitive on the market? We can put you in touch with a mortgage broker to check.
Utilities	Have you been on compare.energy.vic.gov.au to ensure your gas and electricity rates are competitive?
Subscriptions	Do you have old subscriptions (such as streaming services) that you are paying for, but no longer use? Check your bank/credit card statements.
General Insurances	Have you reviewed your car, home/contents and health insurances to ensure the cover is what you need and cost competitive?
Groceries	Have you tried shopping at a cheaper supermarket, with a predetermined list or shopping based on available specials?
Costly Habits	Do you have costly habits such as buying your lunch or multiple coffees every day at work?
Discretionary Spending	Do you have trouble with impulse buying or living above your means?

You can also download our free cashflow template and cashflow guide.

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