It’s a tough life for today’s average Australian...or so they think, according to new research by MLC.
The Australia Today report, conducted by IPSOS, assesses the lifestyle, financial security and retirement plans of 2000 Australians.
Maintaining a decent home and car in a metro suburb, enjoying regular eating out and entertainment, plus an annual overseas holiday is seen as the new ‘average’ lifestyle. We’re also placing far more value on standard of living than our parents ever did. Maintaining this new normal is a struggle for many, often adding to the burden of paying off the mortgage.
This groundbreaking research from MLC lifts the lid on how Australians are living their financial and social lives, creating financial security – or not – and preparing for retirement.
We’ll share unique insights and powerful data in a series of articles over the coming months, to give you a new view on Australians, their lifestyle, wealth and plans for the future.
We’re struggling to have it all
Living well today is what we’re all about. Interestingly, yesterday’s luxuries, such as having the latest technology, entertainment and eating out at least weekly are considered today’s essentials among a broadening self-selected social group we define as the new ‘average Australian.’
So how do we define the ‘new middle’ or the new average Australian? All agreed you need an above-average salary of more than $100,000, potentially be a white collar worker, have an investment property and live in a major metropolitan area.
It all sounds a bit out of reach, but when asked where they fit on the social ladder, almost half of respondents considered themselves to be an average Australian, when in reality only 20% fit into this category based on their demographics. We’re generally far better off than we think, and it’s mostly higher earners underestimating 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 the wealthy are living pay-cheque to pay-cheque, 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.
The cost of comfort
The cost of being comfortable is certainly high. Almost half believe you need a salary of more than $150,000 to live comfortably in Australia. Furthermore, three in five (59%) believed that being worth $1,000,000 doesn’t mean you’re rich in Australia today.
For the most part, living beyond our means is creating a new ‘struggle street’ mentality, right up into the high end of town. An astounding majority (almost 70% of respondents) confessed they are struggling to make ends meet, and 83% believe today’s cost of living is much higher than it was even just 10 years ago.
Unlike our grandparents who lived through a World War (or two) and possibly also the Great Depression, where sacrifice was a way of life ; and unlike our parents who were raised with a ‘waste not, want not’ mindset – the motto of today’s average Australian is ‘have it all, at all costs’.
Are we keeping up with the Joneses…or the Kardashians?
Whether it’s pure hedonism or a ‘keeping up with the Joneses’ (or the Kardashians) mentality driving our ‘have it all’ spending behaviour, we all know we can’t really have it all – don’t we? ‘Why not, when they have it all?’ you ask.
But you see, they don’t.
The average Australian is worried. Not only about maintaining their lifestyle, but they’re worried about how they’ll pay off their mortgage.They’re worried about retirement, and they acknowledge their children will be 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 goals for the future, 67% indicated ‘keeping up their standard of living’ which is not surprising. Almost half cited paying off their mortgage was a goal, while a quarter of Australians dream of an early retirement. However, the overwhelming majority isn’t confident they’ll achieve these goals, with 85% of people agreeing that today we live beyond our means.
Read more articles in the series
MLC and IPSOS, Australia today, Feb 2016.