For many Australians, it’s hard to remember the last time their household budget didn’t feel stretched to breaking point. And despite countless promises, small wins on inflation, and government support payments, the overwhelming feeling among households is that nothing has really improved.
That’s the clear message from Compare the Market’s 2025 Household Budget Barometer, which paints a sobering picture of the nation’s financial mood. Only 7 per cent of Australians believe the cost-of-living crisis has improved in the past year. Even more telling, just 22 per cent feel optimistic about the economy’s future — despite a slowing inflation rate and a lower cash rate.
If there’s a silver lining to be found, it’s that Australians are adapting. The report shows 73 per cent of people actively shopped around for better deals over the past 12 months in an effort to squeeze more value out of every dollar.
But even with these smart money moves, costs continue to climb.
According to Compare the Market’s Economic Director, David Koch, these trends show that Australians are not necessarily better off — they’re simply becoming savvier.
“Prices aren’t coming down – we’re just getting better at looking for value,” Koch said.
“Australians are comparing more than ever – whether it’s car insurance, electricity plans or grocery items. But that doesn’t mean life is getting easier.”
The report also highlights how intergenerational support is helping many families weather the storm — with grandparents stepping in to support adult children, and younger relatives lending a hand to their ageing parents and grandparents.
“While the government has chipped in with energy and childcare rebates, the most meaningful support has come from individuals supporting their families,” Koch said.
“Tough times bring out the best in our communities, but it shouldn’t be up to everyday Aussies to carry such a heavy load alone.
“We need stronger action from governments and regulators to step in and hold companies to account when price hikes go too far.”
While Australians wait for more meaningful action, there are still ways to ease financial stress — starting with a smarter approach to budgeting.
Carrie-Ann McLean, author of Budget Right: Eliminate debt and improve your financial and mental wellbeing, suggests following her simple Budget Right method.
“With the Budget Right method, everyday expenses are covered within 70% of your cashflow,” McLean explains.
“For those big annual bills like car rego, rates or insurance, set up a separate account just for these expenses. Work out how much you’ll need each year, then divide it into a fortnightly amount. By transferring that amount every pension cycle, you’ll build up the funds gradually, so when the bill arrives, the money is already sitting there ready to go.
“And don’t forget it’s also worth shopping around each year for better deals on things like insurance and utilities. A quick phone call or comparison check can sometimes save you hundreds, which stretches your pension even further.”
McLean’s method breaks down as follows:
“Even a few dollars set aside each fortnight grows into something useful over time,” McLean says.
The cost-of-living crisis may not be easing anytime soon, but Aussies are proving they can still find savvy ways to make ends meet and push back against rising costs.
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