One group spending big in cost crisis

While the majority of Australians are cutting back amid skyrocketing costs, one group is spending big on travel and eating out as they reep the benefits of high interest rates. Picture : NCA NewsWire / Nicki Connolly

Baby Boomers are increasing their spending on travel and eating out as soaring inflation and interest rates inflict pain on young Australians.

New data from CommBank iQ has revealed that older Australians have been living more comfortably and increasing their expenses this year, with the average person over 65 increasing their spending by 6.0 per cent in the past 12 months.

Meanwhile, consumers aged 25 to 29 have been forced to cut their spending more than any other age group.

“For these Australians, often facing rental costs for the first time after leaving home, spending went down 5.1 per cent,” the Cost of Living Insights report reads.

Older Australians are splashing out while young people are forced to cut back. Photo: CommBank
Older Australians are splashing out while young people are forced to cut back. Photo: CommBank
Spending on essential items has fallen by 3.7 per cent for Australians aged 25-29. Picture : NCA NewsWire / Nicki Connolly

“That’s more than 10.0 per cent when considering inflation.”

Young Aussies have cut back the most on discretionary items, with their purchases of household goods crashing down by 17.0 per cent while there was a 13.0 per cent drop in spending on apparel and 9.0 per cent cut back on retail services.

Even spending on essential items is going backwards, dropping by 3.7 per cent for 25 to 29-year-olds according to the data.

The majority of Australians are feeling at least some impact as inflation rises by 5.4 per cent in the 12-months to September according to the Bureau of Statistics, down from a high of 7.8 per cent in December 2022.

Things are even worse for homeowners, with the Reserve Bank lifting interest rates 13 times in the past 18 months with the cash rate now sitting at 4.35 per cent.

In what may be salt in the wound for some young people, those over the age of 65 have been spending big on travel, boosting their purchases in the sector by 17 per cent.

The efforts of Boomers have helped push overall travel purchases ahead of rises in inflation, particularly with their spending on cruise trips up 55 per cent.

RBA Rates Decision
Increases in the price of renting and owning a home is one of the biggest thing impacting young Australians according to the study. Picture: NCA NewsWire/Tertius Pickard

One of the only things young people have been spending more on is entertainment, up 13.0 per cent for 25-29 year olds as they spend their money closer to home.

The success of ‘Barbenheimer’ has sent people flocking to the movies, with cinema spending up 31.0 per cent across all ages.

The Matildas efforts in the FIFA Women’s World Cup and musicians touring down under also drove entertainment spending, with ticketing services increasing by 18 per cent.

Not only is there a divide between different age groups in terms of spending, but some states are also spending more than others.

Residents of South Australia and Western Australia saw their spending increase by 2.9 per cent and 2.5 per cent respectively, over double the spending increases in larger states.

Comparatively, spending across all of NSW and Victoria increased by 1.1 per cent and 1.0 per cent a piece, while those in Melbourne and Sydney only managed to spend 0.6 per cent more in the past year as they dealt with soaring costs.