You're exactly right. Australians will be spending big, but they will be spending money they don't have. Christmas might as well just be renamed to Buy Now, Pay Later Month because most Australians already overleveraged will be using credit cards, Zip Pay, Zip Money, AfterPay, Hummm, Klarna and all of the other purchase now to deal with the consequences later services.
How are people surviving right now? Australia is dealing with a serious cost-of-living crisis. Sky-high rents are now one of Australia's primary drivers of inflation. It's sad, we are seeing inflation fall in the US and other countries now, but Australia isn't out of the woods yet because of our vulnerable economy.
The next CPI figures are going to be dismal. Rents have gone up double-digit percentages, which has rarely happened in the history of rents. They rarely go up this fast and hard.
And then we have the floods in NSW, causing the price of lettuce to hit $10, and electricity bills are projected to increase another 50% next year. But people will buy gifts stupidly, not knowing that Australia has yet to experience a true financial storm. It's coming. There will be a severe credit crunch next year, and some people will lose everything.
Australia used to be called the lucky country. Now you're lucky if you have a house and you're not living in your car with your family and your possessions in storage.
Well said, all of it, and I agree with it. When writing this post I was thinking about all the factors you mention and others and was shaking my head at what's to come with the Christmas/Post-Christmas credit spend...and the ramifications of it moving forward and felt good about knowing I'll not be one of those spenders.
But yeah, there's other issues as well and the cost of living is rocketing upwards and it'll not go well for so many people.
Thanks for your comment and thoughts, I appreciate it.
It's quite sad. I've thought about this a lot too. My household is very privileged. We have a good combined household income of over $200k a year. However, our mortgage payment is now 50% of our monthly income. We are at the 3% buffer that the bank used to lend us the money to buy the house.
And I am not complaining. We are fortunate to have a house, but the interest rates are biting hard. We also drive a diesel, and we've been paying $2.38 a litre for diesel. We don't even fill it up all of the way anymore because it's a 150 L tank.
I started a vegetable garden to try and offset the increased cost of living. We are growing two types of lettuce, spinach, cabbages, lots of herbs, tomatoes and a bunch of other things. Still, two adults and two kids, we don't get away with spending any less than $150 at the shop a week. We aren't living lavishly; we buy home brands where possible, yet two bags of groceries are all you can get for $150 now at Coles or Woolies.
People should be scared. I mean, we are scared, and we aren't struggling (yet). We have started to wind back our expenses because we know there will be at least another 0.25 BP increase and some more next year.
It's great to meet another Australian here. I know a few of us, but it's refreshing to encounter someone who also puts effort into what they write. It's rare on Hive you encounter well-written content.
Keep at it. You've got a new follower.
It's rather chilling, all you say, but it's the reality. Many have a lot of suffering ahead of them.
It's sad a combined income of over $200K is insufficient. The good thing is that you're addressing it. I often say it's those who react quickly and with certainty who will have the easiest of times moving forward; but that easy time might not be so easy at all. We are all in for some rough roads moving forward.
I spent 20 years as a commercial and residential real Land Agent and property developer and have seen the best and worst of situations around it. I am also lucky to owe a very small amount on my current residence and carry zero debt elsewhere. I don't go without anything, have multiple vehicles including a big thumping 200 Series LandCruiser, and have hobbies that cost money...but...I have made some adjustments, a lot really, and feel it will pay dividends down the track when things get really hard. I've got my own vegetables and fruits growing, don't go out much, am careful with running vehicles needlessly (my company car with paid fuel helps there) and generally apply an expenditure-conscious ethos. Being the sort of chap that takes care of my things, makes them last and one who has a need-over-want buying ethos helps.
Thanks for your kind words. I'll be honest and say I don't write many leofinance posts but I write daily and enjoy it. I try to inject passion, personality and effort into each, no matter the topic or theme of the post.
Thanks for the follow, I appreciate it greatly.