There is a set of numbers that I think paint the real picture of what is happening inside Aussie households.
You’ll be relieved to know it’s not the latest inflation figures.
It’s the retail trade figures produced by the Australian Bureau of Statistics each month. The reason they are important is that the retail trade includes pretty much anything the typical household spends money on: cars, clothes, petrol, groceries, cafés, restaurants, etc.
The latest data shows that Australians spent a total of $423 billion on retail items in the past 12 months.
When you consider there are about 21 million adult Australians, that works out to be roughly $20,000 per adult a year.
Is that number high?
Well, every household is different, so we’d all have a different answer. But one thing is for certain, the number is a lot higher than it used to be.
The amount spent with retailers by Australian households has increased by 7.5 per cent per annum compounding since the start of the pandemic.
In comparison, in the four years prior to the onset of the pandemic, retail spending increased by just under 3 per cent per annum.
It’s true that the pandemic caused supply chain delays which increased the cost of many of the goods and services we buy from retailers.
But I think technology played a bigger role. Lockdowns forced Australians to adapt to online shopping more readily. We had no choice.
Before the pandemic (2020), 6.6 per cent of all retail sales were made online, which equates to a spend of just shy of $22 billion per annum.
In 2023, 10.6 per cent of all retail sales are made online. In dollar terms, that equates to $45 billion spent online last year – double what we spent online before the pandemic and the lockdowns that accompanied it!
It’s easy to fall into that online spending trap. We’ve all experienced having a discussion with a friend within earshot of our mobile phone about something like a certain brand of sneakers, and the next thing you know your social media is littered with advertising from that brand.
Often it comes with a link to buy now and if you catch us at a weak moment, suddenly we’ve bought something we really had no intent of buying just a few hours earlier.
Throw in technological advancements like ‘buy now, pay later’ and ‘digital wallets’ and it really has never been easier to spend money.
I’m all for technological advancement, and our household is no different with parcels arriving almost weekly.
Retailers are using technology now to get direct access to us and our bank accounts. That’s why it has never been more important than ever to develop good habits around spending and budgeting.
By all means, embrace the technology and convenience, but do it with the awareness that the technology wasn’t invented purely to make your life better. It was also invented to make you spend more…
You are 100 per cent in control of how you spend your money.
That hasn’t and won’t ever change.
If you want to spend less and save more, all you need to do is make the decision to direct your money in that direction.
