Leakage spending putting the bite on savings
SMASHED avocado, coffee and an addiction to food delivery services are on their way to overtaking smoking as Australia’s biggest budgetdraining habits.
While smoking rates have dropped 36 per cent since 2001, takeaway dinners and digital subscriptions such as Netflix and Stan are the costly new habits standing in the way of a first home for many young people. This leakage spending is familiar to many millennials and is costing Australians billions annually.
Data from financial comparison website Finder.com.au reveals Australians bought 383 million coffees every month in 2018.
Priced at $4 per cup, that’s more than $1.5 billion a month. “If you’re forking out for a coffee from a cafe every day, there’s definitely room to cut back,” said finder.com.au spokeswoman Kate Browne. “Dialling it back to two coffees per week could save you around $1060 a year.”
Commonly viewed as modern lifestyle necessities, Uber Eats and Menulog cost a staggering $2.6 billion each year, Finder’s survey of more than 2000 Australians aged 16 and over found.
The analysis also showed more than 11.2 million Netflix users in Australia spend $112 million a month on their subscriptions.
“The cost of convenience can add up,” Ms Browne said.
Despite being on the decline, smoking continues to burn a large hole in Australians’ pockets, with Finder data revealing 2.8 million
Australians are spending $14 billion a year on tobacco. A half a pack a day habit costs smokers more than $100 a week.
MLC financial adviser Matt Neill said making minor adjustments to everyday spending could save Australians thousands of dollars each year.
“Look at digital apps being charged to your credit card and cancel the ones you don’t use,” he said. “If you can cut one $50 takeaway meal from your fortnightly budget, you’ll save more than $1300 this year.” Mr Neill believes the most effective step to reaching savings goals is to create an online budget planner to track expenses sneaking under the radar.
“It is more important than ever to be across what you spend,” he said. “If you update your expenses onto a website or app you can update it as your situation changes. This will allow you to stay up-to-date on your spending habits.”