Recent data from the Frollo money management app shows that Australian households are spending significantly more on groceries in 2022. A comparison between May – July 2022 and the same period in 2021 shows monthly spending on groceries is up 18%, from $592 to $6631.
Other areas where households are spending more than last year are healthcare and medical expenses (up 18%, from $197 to $232) and insurance (up 13% from $282 to $318).
Increasing fuel prices in May and June also had an impact, with average fuel spending increasing 19% in 2022, from $102 to $121.
Boomers are renovating and eating out in 2022
Although each age bracket is spending more in 2022, there are some clear differences between generations when it comes to where the money is going.
Baby boomers are the primary driving force behind the increased ‘home renovation & maintenance’ spending in 2022, more than doubling their monthly expenditure in this category (+164%, from $244 to $646). Although boomers also saw an increase in groceries (+1.7%) and fuel spending (1.9%), these increases were small compared to those for other generations.
Gen X seems to be most impacted by the fuel price increases, spending 34% more on fuel per month in 2022 than in 2021 (from $115 to $155). With lockdowns in various parts of the country between May and July 2021, Gen X could also be more inclined to take the car to work again in 2022.
Another category for which the spending data shows a clear difference between 2021 and 2022 is hospitality. Monthly spending on restaurants, pubs, cafes and takeaway is up 22%, from $1,675 to $2,048. Although each generation spends more in 2022, Boomer hospitality spending has increased the most (+35%) and Millennial hospitality spending increased the least (+11%).
The importance of sound money management
With inflation and interest rates increasing, many Australians are facing mortgage stress or even financial hardship. And as the average Australian has at least two different banking relationships and five or more different financial products, it can be hard for them to stay on top of their finances.
Money management apps like Frollo offer users an overview of all their finances in one app, smart insights to understand their situation and the tools to improve.
And banks are starting to catch up. Beyond Bank recently launched a financial well-being app that shows customers all of their finances, including accounts with other financial institutions. And CommBank, Bank of Queensland and Virgin Money Australia have started integrating spend graphs, insights and budgeting tools in their banking app to help customers better manage their money.
When this is done right, it can have a profound impact on the financial lives of Australians. The average Frollo user:
– Reduces their credit card debt by $470 in the first 6 months
– Reduces personal loan debt by $4,200 in the first 6 months
– Increases their savings by $1,200 in the first 3 months
1 This analysis is based on a sample of 35,000 Frollo users, weighted to the Australian population.
