The Cost of Living Pressure Gauge, devised by Finder, measures the financial burden on Australian households. It integrates findings from Finder's Consumer Sentiment Tracker with official government data, providing a clear depiction of the economic challenges faced by consumers. Updated monthly, the model combines monthly and quarterly data on various aspects such as housing stress, salary projections, household debt, financial strain, savings, holiday intentions, credit card expenditure, the RBA cash rate target, property values and inflation. Presently, the Cost of Living Pressure Gauge stands in the extreme range, at 75%.
So what exactly does this look like in raw terms?
At an extreme pressure level of 75% at the end of December 2024:
60% of mortgage holders cite mortgage stress as a key financial concern, a decrease from 61% last month.
Homeowners struggling with mortgage payments have fallen to 34%, down from 39% last month. Similarly, 46% of renters continue to face challenges paying rent, a slight drop from 48% last month.
On average, Australians have $49,222 in cash savings, down from last month's $34,099.
76% of Australians feel extremely or somewhat stressed about their finances.
The RBA's cash rate target of 4.35% is its highest since 2011.
As of September 2024, annual inflation is at 2.8%.
In November 2024, Australian credit card spending was $37 billion.
46.1% of the total credit card balances were accumulating interest.
One in four (28%) Aussies are saying they can't handle their finances without a credit card.
Comparatively, at a moderate pressure level of 60% in December 2021:
43% of mortgage holders faced mortgage stress.
Only 22% of homeowners had difficulty paying their mortgages, while 39% of renters struggled to pay their rent.
On average, Australians had $34,091 in cash savings in December 2021.
70% of Australians said they were stressed about their current financial situation.
The cash rate target was significantly lower at 0.10%.
Annual inflation was recorded at 3.0% in October 2021.
In December 2021, the total Australian credit card spending was $28.1 billion.
47.5% of the total credit card balances were accumulating interest.
24% of Australians were saying they can't manage their finances without a credit card.
The December pressure reading shows a continued decline from April 2023's peak of 84%. This reduction is largely due to an increase in total savings and decrease in housing stress reported by consumers via our Consumer Sentiment Tracker. Additionally, there has been a reduction in unpaid credit card balances, as reported by the RBA. Nevertheless, the pressure remains significantly higher than the levels observed throughout most of 2020 and 2021. More information on the methodology behind these figures is provided below.
Methodology
Finder's Cost of Living Pressure Gauge merges data from its Consumer Sentiment Tracker (CST) and the Reserve Bank of Australia (RBA). Updated monthly, it combines CST data with RBA figures, which are updated either monthly or quarterly. When specific monthly RBA data is unavailable, the preceding quarter's figures are used.
Percentage data in the gauge has a set maximum, or "ceiling", defined as 100% pressure. For example, if a survey question like "How stressed are you about your financial situation?" has an 80% ceiling, then 80% of negative responses (extremely or somewhat stressed) equates to 100% pressure. Responses exceeding this ceiling are capped at 100%. This weighting is applied proportionally. Non-CST data is converted to a percentage as described below in "Data categories explained". After calculating all data, a global weighting is assigned to each figure, as outlined in the table below. Historical pressure figures may be revised if new historical data is released.
Data categories explained
Mortgage/rent stress: Percentage of consumers who identify their mortgage or rent payments as a primary financial stressor.
Mortgage/rent struggle: Percentage of consumers who find it difficult to make their rent or mortgage payments.
Salary sentiment: Percentage of Australians expecting a pay rise within the next year.
Spend sentiment: Percentage of Australians unhappy with the amount they need to spend monthly to maintain their standard of living.
Household debt sentiment: Percentage of Australians who have negative feelings about the level of household debt.
Financial stress: Percentage of Australians who report feeling extremely or somewhat stressed about their finances.
Credit card dependency: Percentage of respondents relying on credit cards to manage their finances.
Holiday plans: Percentage of Australians intending to go on a holiday in the upcoming year.
Savings index: Average monthly savings as a percentage of $1,000 of income.
Total savings index: Average total savings as a percentage of $50,000.
Cash rate index: Current cash rate relative to a 5% benchmark.
Savings rate index: Current average savings account interest rate relative to a 5% benchmark.
Credit card spend index: Total credit card spending as a percentage of a $35 billion benchmark.
Graham Cooke is the head of consumer research at Finder. He is a seasoned analyst and data journalist who has been covering personal finance, the economy, technology and travel for over ten years. His work has been featured in various publications, including Money Magazine, Yahoo Finance, Nasdaq, The Sydney Morning Herald, The Age and Finder.
He has participated in over 1,000 live TV interviews and appears regularly on ABC News and Radio, as well as 7 and 9 News, Sunrise, Today, Studio 10 and other programs. See full bio
Graham's expertise
Graham has written 57 Finder guides across topics including:
Home loans and the housing market
Credit cards & personal finance
Finder Awards
Retail economics & FMCG
Travel
Finder's RBA Cash Rate Survey, Consumer Sentiment Tracker, Cost of Living Pressure Gauge and Property Investment Index
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