Are you one of the new 'average' Australians?
According to the latest research, it’s a hard life for today’s average Australian…or so they believe.
A report from IPSOS evaluates the lifestyle, financial security and retirement sentiment of 2000 Australians.
The people who were part of the study said that having a decent home and vehicle in a metro suburb, enjoying frequent eating out and entertainment, not to mention an annual overseas holiday is considered as the new ‘average’ lifestyle.
Compared to our parents, we’re also placing far more value on our standard of living than they ever did. Keeping up to this new normal is a struggle for many, often adding to the worry of paying off the mortgage.
This cutting-edge research shows how Australians are living their financial and social lives, how they are generating financial security (or not) and their sentiment around retirement.
The price of comfort
The price of being comfortable is definitely high. Almost half of the people involved in the study believe they need a salary in excess of $150,000 a year to live comfortably in Australia. Furthermore, three out of five (59%) considered that being worth a million dollars no longer means you’re rich.
Results from the study also show that living beyond our means is creating a new ‘struggle street’ mentality for many, all the way into the high end of town. An astonishing majority (close to 70%) confessed they are struggling to make ends meet, and 83% believe today’s cost of living is much higher than it was even a decade ago.
The new ‘average’ Australian is unlike our grandparents who lived through a World War (or two) and perhaps also the Great Depression, where sacrifice was part of their lives; and unlike our parents who were raised with a ‘waste not, want not’ mentality – the mindset of today’s average Australian is to ‘have it all’. But at what cost?
We’re struggling to have it all
We’re all about living well today. Interestingly, yesterday’s luxuries, like having the newest technology, entertainment and dining out at least weekly are considered today’s necessities.
So how do we define the ‘new middle’ or the new average Australian? Everyone who participated in the study said that you need an above-average salary, possibly be a white-collar worker, have an investment property and live in a main metropolitan area.
It all sounds a bit improbable, but when asked where they sit on the social ladder, almost half of respondents considered themselves to be an average Australian, when in actuality only 20% fit into this category based on their demographics. We’re usually far better off than we think, and it’s typically higher earners underrating their position, with the majority still wanting more.
Having ‘what I want, when I want it’ is the new definition of ‘comfortable living’ for the average Australian. The irony is that maintaining this lifestyle means even many of the rich are living pay to pay, with 60% indicating that their salary hasn’t kept up with maintaining their standard of living and 85% agreeing that people currently live beyond their means.
Are you keeping up with the Kardashians?
Whether it’s pure self-indulgence or a ‘keeping up with the Kardashians’ mentality pushing our ‘have it all’ spending behaviour, we all know we can’t really have it all – right? ‘Why not, when they have it all?’ you ask.
But you see, many actually don’t.
The average Australian is concerned. On top of keeping up their lifestyle, they’re worried about how they’ll pay off their mortgage. They’re apprehensive about retirement, and they recognize the real possibility of their children being worse off than they are. The average Australian lacks confidence in the future, with many saying they ‘feel like they’re treading water’.
When asked about their objectives for the future, 67% indicated ‘maintaining their standard of living’ which is not shocking. Almost 50% cited paying off their mortgage was an aim, while 25% of Australians dream of early retirement. However, the overwhelming majority isn’t confident they’ll achieve these objectives, with 85% agreeing that today we live beyond our means.
What if paying off the mortgage and being able to choose when to retire was a real possibility?
This research study showed that those with financial professionals were less likely to live pay to pay, with 77% of people with financial planners or advisers do not need to wait for the next payday.
So I guess the question is, could your financial objectives be a real possibility?
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