In today’s economic landscape, many families, particularly in cities like Perth, are finding it harder to get ahead. With the cost of living rising, mortgage repayments climbing, and essential expenses consuming most of the household income, it’s no surprise that families feel financially stuck. In fact, for the average family earning around $100,000 a year in Perth, up to 93% of their income is being spent on basic living expenses and mortgage repayments. That leaves a mere 7% for everything else, whether it’s saving for an emergency, investing for the future, or even enjoying life.
So, what’s driving this financial squeeze? And more importantly, how can you start taking back control of your money, reduce financial stress, and build a path toward a more secure future? Let’s dive in.
THE BREAKDOWN — Where Does The Money Go?
If you feel like your income disappears before you even have the chance to save or plan, you’re not imagining things. For the average Perth family, a substantial portion of their income is consumed by just a few major categories.
1. MORTGAGE PAYMENTS (39.7%)
With the average house price in Perth sitting at around $690,000, a family making regular mortgage repayments is typically spending about 40% of their income just to keep a roof over their head. That’s a huge chunk of money tied up in home ownership, leaving little flexibility for other financial priorities.
2. LIVING EXPENSES (52.8%)
Next comes everyday living expenses: utilities, groceries, transportation, insurance, and other necessities. For the average family, these costs take up more than half of their monthly income. With rising prices in everything from food to fuel, these essential expenses are only getting harder to manage.
3. WHAT’S LEFT? (7.5%)
After paying for housing and general living expenses, families are left with just 7.5% of their income to cover everything else. This includes savings, emergencies, vacations, entertainment, education, and more. It’s no wonder that many people feel overwhelmed by the prospect of building an emergency fund, paying off debt, or even saving for the future.
Inflation directly drives up the prices of essential goods and services, from food to housing to what it costs to fill your tank so you can drive to work or put clothes on your back.
THE IMPACT — Stress, Debt, and Delayed Life Goals
This financial squeeze has significant consequences for families. When most of your income is tied up in living expenses, it’s incredibly difficult to make progress on long-term financial goals, like saving for retirement, paying off debt, or even taking that well-deserved vacation.
1. INCREASED FINANCIAL STRESS
With such a small buffer between income and expenses, any unexpected cost—a car repair, medical bill, or household emergency—can throw your entire budget off course. The constant worry about money takes a toll on mental health, relationships, and overall well-being.
2. MOUNTING DEBT
When you don’t have enough income left over for emergencies, you’re more likely to rely on credit cards or loans to cover the gaps. This can lead to a vicious cycle of debt, where interest payments eat into what little income is left, making it harder to get ahead.
3. DELAYED LIFE GOALS
Many families are forced to delay or forgo important life goals, such as buying a home, starting a family, or even saving for their children’s education. The focus is on surviving month-to-month, leaving little room for long-term planning.
HOW TO TAKE BACK CONTROL OF YOUR FINANCES
So, how can families break free from this cycle? While it may seem overwhelming, the good news is that there are concrete steps you can take to regain control of your financial situation. By being proactive and strategic, you can start to reduce financial stress, create breathing room in your budget, and move toward financial security.
1. CREATE A DETAILED BUDGET AND TRACK EVERY DOLLAR
The first step to taking control of your finances is understanding exactly where your money is going. Start by creating a detailed budget that accounts for all your expenses—both fixed (like your mortgage and utilities) and variable (like groceries and entertainment). Track every dollar to see where you might be overspending or where small changes can make a big impact.
Use budgeting apps or even a simple spreadsheet to keep track of income and expenses. Once you have a clear picture of your finances, you can start making informed decisions about where to cut back or redirect funds.
2. CUT BACK ON NON-ESSENTIALS
In today’s consumer-driven world, it’s easy to get caught up in unnecessary spending. Start by evaluating your discretionary expenses—things like dining out, streaming subscriptions, and impulse purchases. While it’s important to enjoy life, small sacrifices in these areas can free up extra cash for savings or debt repayment.
Even cutting back on small expenses, like making coffee at home instead of buying it, can add up over time and create more room in your budget for the essentials.
3. REFINANCE OR RENEGOTIATE YOUR MORTGAGE
If a significant portion of your income is going toward mortgage repayments, refinancing your home loan could be a game-changer. Interest rates fluctuate, and even a small reduction in your mortgage rate can lead to significant savings over the life of the loan. Talk to your lender about refinancing options or shop around for better rates.
4. BUILD AN EMERGENCY FUND
While saving may seem impossible when so much of your income is tied up in expenses, building an emergency fund is crucial to financial security. Start small aim to save at least three to six months’ worth of living expenses. This will help you avoid relying on credit cards or loans when unexpected costs arise.
Even putting aside a small amount each month can add up over time and provide a much-needed safety net in case of emergencies.
5. INCREASE YOUR INCOME
If your current income isn’t enough to cover your expenses, it might be time to look for ways to increase it. This could mean asking for a raise at your current job, taking on a side hustle, or even exploring part-time work in a field that aligns with your skills. There are many opportunities today to monetise your talents online, whether through freelance work, selling products, or offering services.
6. PRIORITISE DEBT REPAYMENT
High-interest debt can be a major drain on your income. Focus on paying off debts with the highest interest rates first, this will save you money in the long run and free up more of your income for savings or other goals. Consider using the debt avalanche or debt snowball method to stay motivated and track your progress.
READY TO TAKE CONTROL OF YOUR FINANCES?
If you’re feeling the financial pressure, now is the time to take action. Don’t let another month go by where you feel stuck, stressed, and overwhelmed by your finances. I’m here to help you create a clear, actionable plan to take control of your money and start building a better financial future.
Join my Monthly Coaching Program, where I work one-on-one with clients to help them develop personalised budgeting strategies, eliminate debt, and build sustainable savings plans. Plus, check out my course Mastering Budgeting and Saving Techniques where I’ll teach you how to create a realistic budget that works for your family, find savings opportunities, and finally achieve financial peace of mind.
You don’t have to go through this alone together, we can turn your financial situation around. Click here to sign up for the coaching program or learn more about the course, and let’s get started on your path to financial freedom today!
By following these steps, you can start making meaningful changes in your financial life and work towards a future where you have more control, less stress, and more opportunities to get ahead. Let’s take this journey together!
Mastering Budgeting and Saving Techniques is a program designed to empower you to understand the importance of both budgeting and saving.
In this program, you will learn the fundamental concepts of how budgeting and saving is important for your financial well being.
We will explore and work through mindset shifts to empower and equip you with the tools necessary for a stress free life.
This is a hands-on program with me guiding you on how to budget, track and look at managing your money like a pro.