Universal cost-of-living crunch
More than 2 in 5 Aussies feel that their financial situation has worsened
Cost-of-living pressures remain widespread but deeply uneven, affecting women (49%), lower-income households of <$50K (57%), and older Australians >43yrs (49%) the hardest. Nearly 9 in 10 (87%) Aussies report feeling like cost-of-living pressures had increased more in 2025 than in previous years, underscoring the nationwide scale of the challenge.
So, what’s causing the crunch? As a nation, we’re feeling worried
Managing finances can feel like a balancing act. Nationally, 27% of Australians say they feel the impact of rising living costs daily, with everyday expenses such as groceries, fuel and utilities cited as the biggest contributors to a deteriorating financial situation. Recent Kantar* research of 2,500 Aussies echoes this, revealing 67% of people are actively looking for ways to save on their shop and bills as a way of managing money.
There’s one thing Aussies are agreeing on…
Seeking relief, nearly 6 in 10 (59%) Australians say governments should do more to support households facing rising costs. At the same time, many feel discouraged with politics, with over a quarter (26%) reporting political cynicism. For these Aussies, parties appear identical and meaningful change feels out of reach.
The day-to-day financial strains
Aussies are finding routine costs to be most stressful
Financial stress is most often driven by short-term cost shocks rather than fundamental life changes, led by unexpected bills and everyday expenses such as groceries. Nearly half of Australians (47%) cite monthly bills in their top three financial stressors, followed by grocery shopping (44%).
But the stress starts at home
Day-to-day household costs are often the hardest to manage, from creeping subscription fees and utility bills, to choosing between home-brand and name-brand groceries in store. Even small daily extras – like an extra coffee – can quickly add up, contributing to mounting financial stress.
Many Aussies are not letting financial strain hold them back – what are we doing to combat these challenges?
To make finances stretch further, Australians are cutting back on everyday basics, with 72% reducing eating out or takeaway to rein in costs. Some expenses, however, appear harder to give up – Australians are less likely to cut back on insurance (15%) and gym memberships (18%), protecting what matters most. It seems some New Year’s fitness resolutions are here to stay.
Same pressure, different priorities
Financial goals shift across generations despite shared cost pressures
Regardless of age, Australians are feeling the pinch. From Gen Z to Baby Boomers, cost‑of‑living pressures are showing up in different ways. Despite these challenges, financial goals remain a priority. Gen Z (25%) and Millennials (23%) are focused on building savings as their top financial goal for 2026, while Gen X (22%) and Baby Boomers (28%) are prioritising reducing expenses.
It’s not a house, it’s a home
Home ownership is often seen as the ultimate marker of financial stability, yet almost half of Australians (46%) believe they will never be able to afford a home of their own.
Some things fare better with age
More than two-thirds of Gen Z (71%) report feeling cost-of-living pressures daily or most days, compared to only around 49% of Baby Boomers, suggesting a sharp divide in financial security across generations.
Where you live plays a role in financial security
So which state is the most financially comfortable?
Australians most commonly report their finances as being “under control but fragile”, though some states are more polarised, suggesting greater economic inequality. In South Australia in particular, residents are more likely to report both significant financial stress (29% vs 25% in other states) and relative financial comfort (33% vs roughly 30% in other states). This reinforces that Australians’ financial experiences are diverse and uneven.
Money-saving habits also differ by state
Approaches to cutting costs vary across the country. Over 1 in 3 (33%) of Queenslanders start by cutting costs on takeaway and eating out, while 19% of Western Australians are more likely to cut back on entertainment such as movies, games and social sports. One expense, however, is largely protected nationwide. Only 5% of Aussies say that their gym membership would be the first thing they would cut in order to save.
State-by-state cost pressures
Rising everyday costs are most commonly cited as contributing to people's worsening finances, though it's highest among Queenslanders (94%), and lowest among WA residents (87%). Unexpected costs such as car or home repairs and emergencies can quickly derail efforts to stay financially afloat, with 64% of SA and 63% of Queensland residents citing this compared to roughly 55% in other states.
The gender gap in financial stress
Women and men are experiencing rising costs differently
A clear gap remains in financial comfort between men and women. 1 in 3 men (34%) describe their financial situation as comfortable, compared with just 1 in 4 women (26%). As financial stability becomes an increasingly important goal for Australians, men and women are adopting different approaches to saving and cutting back to manage rising costs.
Men and women cutting costs across the board
Cutting back is often the first step in reassessing household spending, and both genders approach this in much the same way. Men (34%) and women (31%) are likely to cut eating out and takeaway, though women are also more likely than men to cut grocery costs by switching brands and reducing discretionary items (17% vs 10%).
Men are better positioned to manage unexpected costs
When unexpected expenses arise, men are generally better placed to absorb the financial impact. On average, Australian men report being able to comfortably cover an unexpected bill of $3,849, compared with $2,514 for Australian women, highlighting a persistent gap in financial resilience.
The emotional cost of financial stress
Rising costs are leaving many Australians feeling stressed and anxious
Financial strain can be isolating and emotionally draining, regardless of overall financial security. More than 1 in 3 Australians (35%) report that money worries have negatively affected their sleep, followed closely by impacts on mental health (34%) and social life (33%).
For some, the impact runs deeper
For some Australians, financial pressure extends beyond mental wellbeing. Nearly twice as many women report a negative impact on nutrition (31%) compared with men (18%). Men, however, are more likely to say their work performance has been affected by their financial situation (13%), compared with women (9%).
How finances are affecting our relationship
Maintaining platonic, romantic, and family relationships can come with added financial pressure. Both women and men report similar levels of partner and familial relationship strain (22% vs 19%), though women are more likely to experience impacts to their social lives (37% vs 29%).
Survival of the fittest
Reviewing household expenses is like weightlifting…repetition builds strength
One of the first steps in reassessing ongoing household expenses is reviewing insurance policies. Yet less than 2 in 5 Australians (38%) say they are likely to review or switch their car and home insurance in the next 12 months. Regularly reviewing insurance premiums may help uncover unnecessary costs and ensure coverage remains cost effective and aligned with changing circumstances. But professional help can seem too far out of reach for most - Kantar research found that 61% of people feel the cost of financial advice is too high, forcing Aussies to take a DIY approach to their finances.
Older Australians are more insurance-savvy
Baby Boomers are more proactive than other generations when it comes to reviewing their insurance policies, with 74% assessing their coverage each year. However, they are also more likely to report heightened stress about rising insurance premiums and increasing renewal costs than younger generations, with 16% of Baby Boomers saying this is a stress trigger compared to 3% of Gen Z.
The trap of set-and-forget bills
1 in 5 Australians (20%) believe insurance is a set‑and‑forget bill that doesn’t require annual review. Compared with other household expenses, Australians are far more likely to reassess utility bills (19%) and phone costs (28%) every month before taking a closer look at their insurance policies (11%). Insurance policies should be reviewed just as often as other expenses, as vehicles and household circumstances can change over time. Considering shopping around for insurance? Try Youi today.
