A story broke out last week across most of the media about how the average Australian household now spends in excess of $100,000 a year. You can see the full article for yourself in the Herald Sun, and if you search for further information, you’ll find many other sources running with the same story.
The problem with each of these articles is they only give you half the story, but I’ll get to that in a minute.
The figures were calculated by CommSec and based on “…an average calculated for spending divided by number of households across Australia…”
Not sure exactly what that means, but it sounds like total spending by Australian consumers divided by total number of houses.
Chief economist Craig James did point out that although this figure seemed high, many households do now have multiple wage earners.
Each of the articles quote the following figures:
Firstly, they say that the average weekly spend per household is $1974.95. Then they go on to give the weekly spend in the following categories:
- Rent/Mortgage $379.89 a week
- Food, including eating out $307.46 a week
- Insurances and other financial blahs $168.64 a week
- Utilities $72.55 a week
Let me see now, that’s … $928.54
Well, we still have over a $1000 a week left to go. So where is it all going? See, only half the story.
Being a nerdy kind of guy for figures, all of our spending almost since time began gets fed into a great big computer like thingumybob and spews out so much stunningly accurate and detailed accounting information that even our cats get scared.
And they don’t scare easily.
So if I can’t tell you, nobody can.
On the other hand, telling you and anyone else who reads this blog precisely how this family spends its money with stunning accuracy would be a crazy thing to do, wouldn’t it?
If I wanted others to know that kind of personal information, surely I’d get a Reward Card?
So instead, here’s a fictitious account of how the rest of the money might be spent, maybe.
Possible spending, maybe, year end 30th of June 2012 for the BobinOz family.
In this experiment, we are going to take the above forementioned figures as read. If they are the national averages across all of Australia, no point in me change them based on the maybe spending of our one little family. But maybe we can throw some light on where the rest might go by squeezing and merging my possible figures into the national average.
Starting with the most expensive first, and slowly moving downwards, here’s where the rest of our budget went, maybe…
- Entertainment $354.07 a week
- Shopping for stuff $253.23 a week
- Running two cars $215.38 a week
- Other bills $67.69 a week
- Total additional $890.22 a week
- Add figures from above $928.54 a week
- Absolute total, maybe $1818.76
Yes, for us, maybe we didn’t quite get to that national average amount; our annual spending is possibly around $94,580.
Let’s take a closer look at my categories.
This has loads of stuff in it for us, for example, holidays. Our holidays accounted for almost $200 a week out of that figure; we went to Adelaide for a week, Thailand for nearly 2 weeks and who knows where else. We like a bit of travel.
Then there are the sports. Zumba and yoga for Mrs BobinOz, five aside and six aside football for me and swimming and gymnastics for Elizabeth.
Shopping for stuff
Shopping is clothes, furniture, personal care, (you know, toothbrushes and stuff) birthday presents and gifts, electrical goods and way too much on shoes.
Running two cars
Our cars have been hugely expensive, we have spent an average of $115 a week on petrol and around $100 a week on repairs, maintenance and car tax. Cars don’t normally costs this much to run, we’ve been unlucky and we have driven too many miles.
With utilities, insurances and other financial blahs already taken care of by the national average, I wondered why we were paying an additional $67.69 a week. It’s difficult for me though to work out exactly what that extra is for, I don’t really know what the other financial blahs are that the original article referred to.
But I do have Foxtel, for example, and that cost about $30 a week. Then we also had some rather large vet’s fees, something like $40 a week there. Our Australian citizenship fees workout at $10 a week on their own. So just those three comfortably take care of the additional amounts we have paid, maybe.
Incidentally, what I think is covered in the national average fees quoted at the top of the page are doctors and dentists fees, Internet fees, Medibank fees, water rates, electricity and gas, telephony and council rates.
We did, somewhere within all this, maybe spend some money on alcohol, but for the life of me I really can’t work out exactly how much. That really would frighten the cats!
Our family spends too much, maybe. We spend too much on holidays, we spend too much on cars and we spend too much on other forms of entertainment. But we do have a good time!
Much of our car spend though is tax-deductible, because we need them for one of the businesses we run. That would maybe take our annual spending down to below $90,000 a year. We could also cut back on other “luxuries” and no doubt get closer to $80,000 a year spending.
That said, maybe our mortgage/rent payments are lower than the national average above, because maybe I’m older than the average Australian resident and have therefore maybe paid off more of my mortgage. So that would put our annual spend up again.
Either way, it is easy to see how families can spend $100,000 a year here, and how important one very good salary is, say $125,000 a year, or two average incomes ($69K a year is the current Australian average) for you and your family to live reasonably comfortably here in Australia.
Or maybe you could buy less shoes.