Money Minute – August 17 2017 The Family Squeeze
Listen, its also the traditional day when people get paid, of course.
Except these days, it’s clear, your pay packet isn’t going as far as it used to.
The Bureau stats show the average of the pay packet rose just 1.9 percent in the last financial year – barely keeping up with inflation.
If you’re in the public service, it’s a little better – 2.4 percent.
But for the vast majority who work in private enterprise – 1.8 percent.
In other words, after inflation… you’re going backwards.
The problem, and it’s ongoing, is your personal family inflation rate is most likely higher than the official 1.9 percent.
Think of rising costs of families can’t avoid, like health insurance.
The average price rose 4.8 percent this year. That’s after successive years of five percent increases.
Home and car insurance – there’s an average four percent rise this year… on top of a three percent rise last year.
Electricity – depending on where you live – it’s up between five and 20 percent.
Less in Queensland, where there’s a surplus of energy.
More in New South Wales and Victoria. The most in South Australia.
Kids education – costs have increased and the governments changed rules so uni students will see an extra $2,000 in the price of their courses by 2021.
Now a couple of days ago, economic research IBISWorld said a typical family will see their discretionary income cut $1,700 this year.
That’s because the price of essentials are rising so fast.
So what gives? The family holiday? Home repairs? Updating your wardrobe? Or buying a new pair of shoes?
And every other part of the economy feels that.
One tone tell-tale of this …its household savings.
Families are now starting to dip into their savings to manage the higher prices they’re being forced to pay.
The other part of the equation is employment.
The latest numbers out today, and while the unemployment rate is flat, underemployment is high.
People can’t get enough hours to help pay those higher bills.
As I say…something has to give
The Dow Jones overnight up 25. 79.25 US Cents