A third of Australians live payday to payday

Consumer confidence may be at its highest in more than 30 years, but for many Australians last week's announced tax cuts will have little impact on their day-to-day lives.

A survey conducted by career networking site Linkme.com.au shows that 34.3 per cent of Australians live "pocket-to-mouth".

And while 82 per cent would like to plan their finances better, 43.5 per cent say they did not make enough money to be able to budget any differently.

And for 29.6 per cent in the survey of more than 800 respondents, they say unexpected expenses always get in the way of getting ahead financially.

”Recent tax cuts will not improve the situation for most people and housing shortages and rising rents are just making things worse,'' Linkme.com.au CEO Campbell Sallabank says.

”Housing prices, petrol, bread and milk costs have all sky rocketed whilst salary levels have languished over the past decade.''

Tax cuts help, but more money sought

Tax cuts from July 1 will see a monthly saving of $14.42 per week or $750 per year for someone on an average salary of around $50,000.

For people in the $30,000-$40,000 wage bracket, they will get a slightly higher $21.15 per week or $1100 per year, but for anyone on $25,000 per year of less, they will get just $2.88 per week or $150 per year.

Data released yesterday showed consumer confidence is sitting at its highest since January 1975.

But Mr Sallabank says 24.6 per cent of respondents say they are currently forced to look out for a job that pays more money, while 61.3 per cent say they have to make their lifestyle suit their pay and this means cutting back on luxuries in order to survive.

”The reality is there are tremendous skill shortages in Australia and employees can charge themselves out at a premium,'' Mr Sallabank says.

”There seems to be a great deal of job hopping and no wonder as the pressure to make ends meet is reaching boiling point.''

Source: AAP

Home finance worries as most Australians will experiance financial difficulty in their lives

Three-quarters of Australians experience financial difficulty Super and home affordability are common concerns.

75 percent of Australians will suffer financial difficulty in their lifetimes, with home affordability a common worry, a survey finds.
Trouble understanding superannuation and not being able to afford the home they want are ranked as the most common concerns.
And not surprisingly, the young are worse off than older generations, says a study by the Financial Planning Association of Australia (FPA), published today.
FPA chief executive Jo-Anne Bloch said young people needed to take control of their finances now, not when they're older.
“Young people need to think about their financial future today, not in 20 years time,'' Ms Bloch said.
“They need to consider salary sacrificing, insurance and good budgeting practice now.''
Financial difficulty widespread The FPA found that of the 1100 people surveyed, 73 per cent of Australians had experienced financial difficulty.
The most common woe was not being able to understand superannuation, with 39 per cent of respondents listing it as a problem.
Being unable to afford a home ranked second, at 35 per cent, while meeting major unexpected expenses (30 per cent), regular expenses (24 per cent) and the cost of education (22 per cent) rounded out the top five.
Credit card concernsCredtt card debt troubled 17 per cent of respondents, and 11 per cent struggled to pay large bills.
Generation X and Y - those born after about 1964 and 1978 respectively, struggled more to meet the cost of housing than older geneations.
The survey found 51 per cent of those between 25-34 unable to afford the home they wanted.
Only 26 per cent of those older than 50 had similar troubles.
Financial tips the FPA recommends include setting realistic financial goals, sparing use of credit cards, sticking to a budget, and shopping around for loans.
The FPA survey has been released to coincide with financial planning week, which begins today (May 21) and runs until May 27.
AAP

Higher interest rates are slowing credit card use

Applications for new credit cards have fallen for the fourth quarter in a row as shoppers fear further interest rate hikes, a business information group says.
Consumers are instead choosing personal loans, including store finance with interest-free periods, in much greater numbers, the Veda Advantage credit research concludes.
Credit card applications fell 7.3 per cent in the January to March 2007 quarter compared with the same quarter in 2006, down 70,498 applications to 889,396, according to the Vega Advantage research.
The drop represents a 2.2 per cent decrease on the immediately preceding October to December quarter.
Credit surge ends It is the fourth quarter in a row that credit card applications have fallen, down from the all-time high in the previous March quarter of 959,894 applications.
At the same time, personal loan applications rose 7.7 per cent to 745,753 in the January to March 2007 quarter, 53,067 more than in the corresponding quarter of 2006.
That result is a 2.4 per cent increase on the immediately preceding October to December quarter.
Veda Advantage's information services general manager Erica Hughes forecast the two-year surge in new credit has ended.
"This continuing slowdown in the rate of new credit card applications appears to reflect that consumers are increasingly concerned over the high interest rates attaching to the use of credit cards, and of the threat of more interest rate rises," Ms Hughes said.
Overall credit growth was still increasing, she said.
"However, more and more consumers are looking to more cost effective credit products, such as personal loans, to finance their purchases."Source: AAP