This single spending habit could threaten your savings
As inflation rates hit record highs - at 7.75 percent for Australia and 7.3 percent for New Zealand - many are finding their savings are taking a hit under the soaring cost of living.
But it isn’t just rising fuel and food prices you need to worry about, according to ANZ Plus team member Danielle Curry.
In fact, there’s one commonly forgotten expense that’s making staying on top of our finances even trickier: phone apps.
Apps like Uber Eats, Afterpay services, and those for your favourite stores, along with “must-have” shopping trends are making it so that mobile apps are driving our desire to spend money easily and beyond our means.
According to new research from ANZ Plus, over recent years Aussies have consistently “overspent” the most on eating out and takeaway, with 53 percent noting that their top expenses were food-related.
“There’s this real immediacy of spending that is becoming very normal for Australians,” Ms Curry told news.com.au.
“And especially during the pandemic, we saw a lot of restaurants convert to home delivery services so people were still ‘eating out’ but just a bit differently.”
A noticeable surge in online shopping and subscribing to streaming services also coincided with thousands starting to work from home during pandemic-induced lockdowns, accounting for Aussies’ overspending by 35 percent and 19 percent respectively.
“And with the advent of things like buy now, pay later services it has really allowed that real immediacy of spending,” Ms Curry added.
“Twenty years ago you couldn’t order something from Amazon and have it arrive the next day … so if you’re not tracking your expenses, are you really sure exactly how much you’re spending on things like Amazon?”
Ms Curry said one of the most concerning findings from the research was that a third of Ausies struggle to manage their finances, with 1.5 million of those surveyed admitting they “don’t feel in control of their money at all”.
Though data from Westpac suggests that the average Australian has around $22,000 in savings, big savers that skew the data means that a more realistic figure is closer to $3500.
In response to skyrocketing electricity bills and other living expenses, many have chosen to cut down on “unnecessary expenses” and try to save any way they can.
Ms Curry said that even though most are trying to make ends meet, poor budgeting skills could leave many blindsided.
“We know that a lot of people don’t feel in control and it’s because they don’t have the knowledge about their own finances,” she said.
“But the first thing to understand is that it’s going to be different for every single Australian … and it’s important that everyone understands their own situation.
“(It’s different) for some who might be financially struggling to make ends meet has to make choices between food and the electricity bill versus someone who is financially comfortable and is quite able to make a luxury purchase.”
But, there are some ways we can take back control of our finances, such as tagging and categorising your spending through your banking app.
This can help you identify “unnecessary” or passive purchases that can be stopped, such as forgotten subscriptions.
“Everyone is at a different stage in their lives and make custom everyday expenses,” Ms Perez said.
“(But) once we can really understand what we’re doing with that money we can see if there are trade-offs … to find that extra five dollars to add towards our savings.”
Digital budgeting apps and tracking tools, including those offered in banking apps can also help you set up savings goals, a budget, and a savings buffer based on your financial situation.
“Using these kinds of nifty features that we’ve got around expense categorisation and setting up savings goals, really help push your finances to the next level,” Ms Curry said.
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