Research reveals the reason why Aussies are overspending

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According to new research, Australians’ decreasing reliance on cash is leading people to lose control of their finances.

Choosi’s Alternative Payments Report found that while most people enjoy the ease and convenience of using alternative payment methods, spending behaviours are changing as a result of not needing to physically hand over cash.

More than seven in 10 respondents (71.3 per cent) think alternative payment methods make it easier to spend money that they would not spend otherwise, and more than a third (34.4 per cent) of those using these methods feel they overspend.

Choosi spokesperson Katrina Foster said: “It’s clear that alternative payment methods can be beneficial to the everyday Aussie and are now an integral part of our day-to-day lives. However, it is concerning that not having to hand over physical cash could be leading us to become blasé about our spending.

“Our research shows a steady increase in how much Aussies are spending through alternative payment methods. Whilst that’s not necessarily damaging in itself, it’s important that Aussies are conscious of the amount they are spending and how all these purchases can add up.”

Aussies have increasingly embraced alternative payment methods, spending a total of $86.97 billion annually via tech-driven platforms, according to the report.

Over two thirds (67 per cent) of Aussies use alternative payment technology, such as tap-and-go, to make everyday purchases. Those using these methods estimate doing so for 61.9 per cent of their routine purchases, which amounts to $136 out of an average $220 weekly spend.

Interestingly, the research also sheds light on the fact that Aussies are regularly overspending at social events. Over half of respondents (53.9 per cent) said they end up overspending at social events such as drinks or meals out with friends, and more than two in five (43.5 per cent) admit they have avoided going to social events to dodge awkwardness about ‘financial etiquette’.

In addition to this, over a quarter (27.1 per cent) have experienced disagreements with friends over money. Of these, close to half (47.3 per cent) admit to these arguments resulting in lost friendships.

However, there is evidence that Aussies are making a more conscious effort to get their overspending under control. Close to half (48.8 per cent) say they follow a rough budget and, of those who have at least one credit card, close to two-thirds (64.7 per cent) make the full payment every month.

“As the use of alternative payments becomes more common, Aussies are naturally factoring in these behaviours into how they budget for routine spending and social commitments,” Ms Foster said.

“There’s already been a shift in spending habits, with Aussies increasingly hosting social events at home and being more sensible about cutting down on easy but unnecessary purchases to reign in overall spending.

“This research emphasises the importance of keeping track of our individual spending habits, particularly under the social pressures that go hand in hand with adhering to financial etiquette.

“It is encouraging to see that Australians are taking the necessary steps to minimise financial stress and maintain positive relationships with friends and family.”

Do you use cash to pay for routine items, or do you use a cash alternative? Do you find it harder to keep track of your money when using alternative payments? What advice would you have to help people manage their budget when they are not using cash?

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Written by Ben


Total Comments: 25
  1. 0

    That’s right . It’s not ones inability to live within ones means . It’s all because we have new ways of spending

    • 0

      I rarely agree with trolls but you are correct.
      This is a lack of self control and the refusal to have personal responsibility. Nothing more.

    • 0

      There’s hope for you yet

    • 0

      There’s no denying it’s easier to overspend using a credit card. When you use cash, you see how much (or little) is left, and when it’s run out, you CAN’T spend more.

      Of course lack of self-control and personal responsibility is the core problem, but people who struggle to manage money well will always find it harder when they can simply flash a card.

      I cut up cards years ago because my partner lacked self-discipline. Then I started a system of pinning a sheet of paper to a bulletin board and listing purchases and the balance. At the top of the sheet, I listed a budget amount. When the budget figure was reached, I insisted the card be locked away until the start of the next period.

      Now, my partner has a debit card and I deposit a fixed sum every month. It’s interesting that since I started doing that, the spending has reduced and the account balance is actually growing slowly.

  2. 0

    I keep a budget and record how much I s spend. Still use physical cash to pay for smaller purchases and the lawnmower man. Yes we do we have less control due to cards however is tis up to us to take control of what we spend and to learn to live within our means

  3. 0

    We use a card for everything to get frequent flyer points. However, we still have a budget and track our spending. A card is a method of payment nothing more. You know if you won’t be able to pay it off in full each month. We also take out a fortnightly allowance in cash for incidentals. Live within your means people

    • 0

      I more or less do the same Sunday. But in addition every week, whatever coin change I have left at the end of the week, I put in a piggy bank (literally). When no more can be inserted, I count it up and go to the bank to change it into notes – not put it in my account. Because of the size of the piggy bank it usually amounts to around $200. That is my ‘play’ money with which I can do whatever I want (or nothing at all). Kind of guilt-free ‘free’ money!

      And yes… it’s usually $100 note heheheh

    • 0

      Got away from the reward programme on the credit card, cost me too much as it used to be 2 points for every dollar spent then it went to dollar for point and just before I quit it was $2 spent for a point. Cannot afford to be without a card but now I changed it to basic with no bells and whistles. Managed to keep it slightly in credit most of the time so I won’t pay the interest either. Paid my electric bill at the post office with a debit card but even that costs money now because it goes with Visa.

    • 0

      I pay everything with card now, for the rewards. They are great. Cover all my Christmas bills. The card is free because I have some bank shares, so the rewards are just a nice bonus – plus they give me free purchase insurance, travel insurance and extended warranties.

  4. 0

    Oh right…. “It’s not me out of control…… the watch, phone, card did it!”…… Got it!

    Just another excuse to outsource blame and responsibility for one’s own actions.

    • 0

      It’s the labor way
      Runs off on some Aussies

    • 0

      I don’t think that’s what the article was saying. It was saying it is easier to lose control when you use card, and that’s certainly true. If you rely on cash and have none, you don’t spend. If you have very little to last until payday, you reduce spending to make it last. With cards, many people find it hard to keep track. Yes, it’s lack of discipline – lack of organization etc. But I don’t see anybody blaming the card or the phone. Just correctly noting that overspending tends to increase when people use cards.

      What surprises me is that took a survey to determine that. I would have thought it was plain common sense!

      And Raphael, it has NOTHING to do with Labor or Liberal, or any other politics. It’s human nature.

    • 0

      I’m with you Raph – Trades Hall and their political puppets just bash banks and blame everyone else from the top end of town, because the little guys cant control themselves. Always some one else’s fault when the proverbial hits the fan…very much Labor dogma. The mantra is ‘When it goes belly up, even if you are solely to blame, lets find someone with deep pockets, and sue the bej…s out of them!’ No self control, no responsibility!

    • 0

      Yes I agree People should stop using debt to spend. We are long overdue the recession needed now that incomes are deflating in real terms. Inflation and interest rate rises will hit those with debt hard.

      Stopping spending and paying down their debt is sensible.

  5. 0

    Sounds like a bit of promotion for a cashless society.

  6. 0

    I always pay with cash or BPay. People are only using cards because they are being forced on them. They have no idea how much they are spending and the cost of using these cards. Its like paying at the self serve in the supermarkets, you are doing people out of jobs and working for the supermarkets for nothing. Idiots!!

  7. 0

    Why am I over spending? Hmm because prices are sneaking up?

    • 0

      If youre overspending then you’re irresponsible.

    • 0

      Raphael is right Charlie. If people refused to use debt then prices would adjust down to the level of the share of productivity enjoyed by the bottom 80%. Prices would be falling instead of rising.

      They can only raise prices because we are happy to use debt to pay.

  8. 0

    To pay all my fixed costs, rates, electricity, regos house & car insurance, internet, medication etc. I have to put $404 a fortnight in my bill paying account. It meets all these costs with a little to spare, as they arise leaving me worry free.

    The rest of my pension I withdraw & put in my wallet, then pay cash for everything from petrol to clothes. Each fortnight I put what ever is left in my wallet into my fun account. This then funds my hobbies. This is a simple, worry free way to be able to buy a few luxuries on occasions, with the fun account without worry

    One important thing is not to get excited & start spending when the bill paying account gets a few thousands in it. This just means the rates & a few other things are about to arrive. It is not rocket science to handle your money worry free.

    • 0

      Hasbeen – that is absolutely the way to do it but you do have discipline as you mentioned when the account gets too high. We expect the council rates and the body corp bill in the next few days and the account looks good – it won’t be after the bills are paid. I am looking at the amount as not being there at present and so I won’t be counting on it for spending. I use a credit account like that, building it up and then use it when payments are due. Sure there is no interest but what do you get in a savings account?

  9. 0

    I am sticking with cash so I know when to stop spending!

  10. 0

    I’ve never had an overspending problem even though I have been using credit cards for over 40 years…..and I’ve always paid the full amount owing each month. I always use a credit card in preference to cash and as a result, I am able to accumulate around $1,000 in point per year.
    As others have said in this post, you have to live within your means and be disciplined. If you do this, it doesn’t matter what method of payment you use.



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