Households thinking more about where they spend their money

The NAB Consumer Sentiment Survey found that 40 per cent of consumers are making deliberate changes in their discretionary spending to combat the rise in the cost of living.

These changes include things such as reducing the number of coffees or lunches eaten out of the home, reducing the number of car trips they make to save on fuel costs, and cutting back on entertainment like going to the movies.

Around a third of Australians have also changed or scaled back holiday plans, cut back on ordering food through delivery apps, and cancelled or delayed a major household purchase like a new TV or washing machine over the past three months.

NAB group executive personal banking, Rachel Slade, said people were making their own adjustments to stay on top of their money amid a rising cost of living.

“Australians are now making small but thoughtful changes to their purchases to keep on top of increasing costs,” Ms Slade said.

“People are prioritising the things that matter for right now and spending less on big ticket items like travel or holidays, home improvements and major household purchases, as well as eating out and entertainment.”

However, the research also revealed that Australians are not yet considering cutting back on spending on their children, their pets, and or personal fitness.

Outside of the home, Australians remain committed to meeting the costs of school fees; kids’ activities like sports; dance and hobbies; looking after their pets; and looking after themselves with gym, sports, or club memberships.

Despite the move to more ‘thoughtful spending’, NAB’s economic data showed that total spending was up 1.6 per cent in the December quarter but has largely levelled off, marking the slowest quarterly growth rate in 2022.

Australians are still expected to spend more when it comes to groceries, utilities and energy bills, and medical expenses as costs increase.