Interesting article on cost of living

[VERYSTORMY]

One of our best (Lady Rainicorn) posted this in another thread, but, i think it is worth a thread of its own. A lot of people coming here really do not get a feel of just how expensive it is. Its ok for those that have been here a long time and arrived when housing was cheap. But for those arriving now, when the averahe house price in WA is nearly half a million bucks. It is a damned expensive move and people can easily find themselves a lot worse off financially. The article is a year old. But, Perth has not got cheaper in a year. Just the opposite.

 

 

http://www.watoday.com.au/wa-news/frightening-daytoday-costs-creep-up-the-salary-ladder-20120327-1vwon.html

[arrada]

wow that is quite an eye opener especially when you keep hearing that wages make up for the higher COL which doesnt necessarily seem to be the case. Thanks for the link.

[VERYSTORMY]

No, they certainly dont. A lot of people have had it pretty good in WA for a long time. But, as the state is very linked to mining and that is slowing rapidly, there are a lot of people going to find that there are on a salary that they will find hard to deal with.

[Bibbs]

So the story is ..

 

Average salary is $80k, guys earns $90k but has a 19 year old son at Uni. He's struggling.

 

Well yeah, he would be. That's two adult people living with one salary.

The average household income back in 2012 was over $92k.

http://news.domain.com.au/domain/real-estate-news/perth-tops-the-nation-with-mortgage-and-rent-20120622-20s7k.html

 

$90k gives you just under $1300 a week after tax.

He spending $350 on his house loan (which is a tiny amount), so where is the other $950 a week going?

I think he needs to cut back on the beers & FoxTel, sell the car he must have finance on, and start catching the train/bus.

 

Maybe his son could get a part time job.

 

He'll also be benefiting from the 3 rate cuts we've had lately.

 

EDIT - to add

 

And that $92k is the *average*, there are a lot of people in the Perth area. So if you want to live somewhere "above average" and enjoy "above average" things. You'll need a salary to match.

 

Having one salary compared to two also doesn't work the tax system as well (two people on $50k is better than one person on $100k).

Edited July 3, 2013 by Bibbs
formatting

[akiralx]

The massive issue, especially in the UK but also here, is that employers have driven down wages to unsustainable levels, when productivity levels have increased constantly over recent years. When people are working full time but still receiving benefit/welfare to survive, something is clearly wrong.

[flag of convenience]

Wage increases have certainly not kept abreast of costs and it amazes me some claim that it has. With some no doubt, coming from low wage UK, the high value of the dollar along with higher earnings would reflect very positively on their outlook, others here a long time on salary may well find otherwise.

 

Most folk I know would be earning fairly well but have in recent years become very much more conscious on costs. Eating out at cheaper places has become the norm. They all for the most part complain about the cost of living after returning from Europe.

 

A number have their kids still living at home in their twenties with little likelihood of moving out anytime soon. No there has been a definite change over the past five years I guess. Some are not as secure in their jobs, others lost out on super a few years back .

[nicolac34]

Interesting but not shocking.

 

Personally I don't understand how many people survive if they are earning less than $90k a year, especially if they are a one-income family. A couple both earning that would be pretty comfortable, but I'd still not consider them rolling in it.

 

We are back to being a double income couple after OH was unemployed for 8 months. From the outside if you combined our salaries I'm sure many people would say we are very comfortable (even though OH is earning $30k less than he used to before he was made redundant) we'd like to start a family soon. Can we afford to? Nope.

Edited July 4, 2013 by nicolac34

[Johndoe]

So the story is ..

 

Average salary is $80k, guys earns $90k but has a 19 year old son at Uni. He's struggling.

 

Well yeah, he would be. That's two adult people living with one salary.

The average household income back in 2012 was over $92k.

http://news.domain.com.au/domain/real-estate-news/perth-tops-the-nation-with-mortgage-and-rent-20120622-20s7k.html

 

$90k gives you just under $1300 a week after tax.

He spending $350 on his house loan (which is a tiny amount), so where is the other $950 a week going?

I think he needs to cut back on the beers & FoxTel, sell the car he must have finance on, and start catching the train/bus.

 

 

 

Agree. We're on a similar single salary (family of four)..................neither of my kids contribute to home expenses. Although we are mortgage free, we pay an extra $400 fortnightly into superann and cash save $300 (which equates to our ex mortgage payments) so we expend the same as him. Our utilities would be way above his with leccy coming in at $1200 a quarter and water $450. We are also feeding two young men and running 2 vehicles, and find we are "comfortable". Either WA is out of control, or that bloke's spending is.

[fifi69]

I think people must have a very diff view to what makes a life comfortable.

 

i agree WA can be expensive, but you can survive on the average salary and still have a decent life but not if its a big house, new car, boat etc that makes your life comfortable.

 

if you want to enjoy gorgeous scenery, great beaches, laidback lifestyle then its more than doable IMO

[Bibbs]

or that bloke's spending is.

 

I think that's the issue. People tend to spend up to their earnings when they get a raise. They tend not to downsize when they start earning less.

 

Yes it's expensive (the wife and I worked out our bills are almost $60k a year before food, and entertainment), but I know if a crunch started we'd go without the FoxTel, concerts, sporting events, eating out 2/3 times a week, the carton of piss on a weekend. We'd downsize the car and use the AC more sparingly.

 

We'd also look at 2nd jobs of an evening/weekend.

 

I think the guy in the article is just throwing his toys out the pram (or pretending to to get the $500 they'd have paid him for the article).

[nicolac34]

I think that's the issue. People tend to spend up to their earnings when they get a raise. They tend not to downsize when they start earning less.

 

Yes it's expensive (the wife and I worked out our bills are almost $60k a year before food, and entertainment), but I know if a crunch started we'd go without the FoxTel, concerts, sporting events, eating out 2/3 times a week, the carton of piss on a weekend. We'd downsize the car and use the AC more sparingly.

 

We'd also look at 2nd jobs of an evening/weekend.

 

I think the guy in the article is just throwing his toys out the pram (or pretending to to get the $500 they'd have paid him for the article).

 

That's all well and good being able to cut down on those sorts of things - but many people coming to Australia believe that they won't have to compromise like that and will be able to have all the trappings and 'lifestyle' that goes with it.

[nicolac34]

I think people must have a very diff view to what makes a life comfortable.

 

i agree WA can be expensive, but you can survive on the average salary and still have a decent life but not if its a big house, new car, boat etc that makes your life comfortable.

 

if you want to enjoy gorgeous scenery, great beaches, laidback lifestyle then its more than doable IMO

 

I agree fifi, people will have different priorities and view some items as more of a luxury than others. But I know we couldn't survive on the 'average' salary and we don't have a big house, we bought in a suburb that doesn't have an amazing reputation and it takes me an hour to get to work as this was all we could afford, we certainly don't have a boat and our car is 18 years old.

Sorry, feeling a bit sick of the place today :err:

Edited July 4, 2013 by nicolac34

[VERYSTORMY]

The issue is though, what is the point of moving to the other side of the world to be worse off? Sunshine? It costs tens of thousands to do it, you could buy a place in Spain for the price and have lots of sunshine and not be worse off in income.

 

Or is it less working hours? Working hours in Oz are the second longest in the developed world?

To travel? Oz is one of th most isolated places on the planet. Travel is expensive and you give up having europe on the doorstep

The countryside? Oz is largely a big desert that is empty. If you want to see a desert, jump on a cheap plane to Tunisia and see the Sahara.

[Guest The Ropey HOFF]

wow that is quite an eye opener especially when you keep hearing that wages make up for the higher COL which doesnt necessarily seem to be the case. Thanks for the link.

 

 

At least wages HAVE gone up in Australia, compared to the UK where wages have either stagnated or dropped like a brick. It's dear everywhere, especially here in the UK there's been over one million jobs created here, but wages have dropped by £52 Billion pounds and people are struggling here more than ever.

[arrada]

I think you have hit the nail firmly on the head with this post. We are very much in the will we wont we camp and with the way things are going it is more likely that we wont make the move. We are extremely comfortable in a lovely area, wife just had sizeable pay rise and my business doing well. Seems a lot to give up for an unlikely possible improvement.

 

The issue is though, what is the point of moving to the other side of the world to be worse off? Sunshine? It costs tens of thousands to do it, you could buy a place in Spain for the price and have lots of sunshine and not be worse off in income.

 

Or is it less working hours? Working hours in Oz are the second longest in the developed world?

To travel? Oz is one of th most isolated places on the planet. Travel is expensive and you give up having europe on the doorstep

The countryside? Oz is largely a big desert that is empty. If you want to see a desert, jump on a cheap plane to Tunisia and see the Sahara.

[Guest The Ropey HOFF]

I think you have hit the nail firmly on the head with this post. We are very much in the will we wont we camp and with the way things are going it is more likely that we wont make the move. We are extremely comfortable in a lovely area, wife just had sizeable pay rise and my business doing well. Seems a lot to give up for an unlikely possible improvement.

 

If I were you I would stay in the UK, it's still a great place to live, especially if you are lucky to have decent jobs and a good lifestyle. A lot of folk aren't this lucky though and Australia is a better option for them, that's why most of them who go say their lives have been enhanced, especially for their kids.

[Guest hoffer]

Im glad we have not made the decision based on temporary gain as this sort of post would always put a dampener on it

[Paul1Perth]

The massive issue, especially in the UK but also here, is that employers have driven down wages to unsustainable levels, when productivity levels have increased constantly over recent years. When people are working full time but still receiving benefit/welfare to survive, something is clearly wrong.

 

Heard on the radio a couple of days ago that the story about "productivity levels have increased constantly over recent years" is just that, a story. Productivity levels have actually fallen or remained static since the GFC.

[Paul1Perth]

Interesting but not shocking.

 

Personally I don't understand how many people survive if they are earning less than $90k a year, especially if they are a one-income family. A couple both earning that would be pretty comfortable, but I'd still not consider them rolling in it.

 

We are back to being a double income couple after OH was unemployed for 8 months. From the outside if you combined our salaries I'm sure many people would say we are very comfortable (even though OH is earning $30k less than he used to before he was made redundant) we'd like to start a family soon. Can we afford to? Nope.

 

You can never afford to start a family nicolac34. Don't even think about trying to work out how much it costs, you would never consider doing it. I ran the same argument by my missus when she said she wanted to try for a baby. Married about a year, me a fairly new graduate, on less salary than I was on as a 19 year old fitter after my apprenticeship. She would obviously have to give up work for a while.

 

Her argument was everyone else seems to manage and you do, manage that is. You have to give up a lot and your life changes. You have to be ready to accept that.

 

I tried the same when she wanted another one when we were here and we somehow scraped by again. That one has autism too so all the extra costs and worry that go along with that.

 

Would I be without either of them now, no, I think they've been a godsend for all the worry and expense. As long as you don't carry on trying to behave like you don't have kids, you'll be fine and somehow manage to scrape by like my missus says.

Got to admit though when we were in the UK and the highlight of the weekend was taking the eldest down to the local park and duck pond, with wet weather gear all over the pram, typical Manchester weather, both of us wrapped up and then the realisation that we weren't going to be able to afford our usual trip abroad that year, it got us down a bit. You can see why we emigrated.

 

Good luck.

[Paul1Perth]

That's all well and good being able to cut down on those sorts of things - but many people coming to Australia believe that they won't have to compromise like that and will be able to have all the trappings and 'lifestyle' that goes with it.

 

The "lifestyle" that most are seeking though is not expensive. We enjoy the beach, the weather, being able to get out more. Basically the things that come free just from living here.

[Paul1Perth]

The issue is though, what is the point of moving to the other side of the world to be worse off? Sunshine? It costs tens of thousands to do it, you could buy a place in Spain for the price and have lots of sunshine and not be worse off in income.

 

Or is it less working hours? Working hours in Oz are the second longest in the developed world?

To travel? Oz is one of th most isolated places on the planet. Travel is expensive and you give up having europe on the doorstep

The countryside? Oz is largely a big desert that is empty. If you want to see a desert, jump on a cheap plane to Tunisia and see the Sahara.

 

Do you mean going to live in Spain and not be worse off. If that were possible I don't think people would bother making the huge trip to Aus. All the things you mention you would have to travel for, with the extra costs of getting to wherever.

 

Doubt if many come here for the desert but loads do come for the weather, beaches on the doorstep and you don't have any language issues like you would if you moved to Spain or somewhere else with a nice climate. As for working hours they have been much the same as the UK, everyone knows they will have to work.

[Guest The Ropey HOFF]

Do you mean going to live in Spain and not be worse off. If that were possible I don't think people would bother making the huge trip to Aus. All the things you mention you would have to travel for, with the extra costs of getting to wherever.

 

Doubt if many come here for the desert but loads do come for the weather, beaches on the doorstep and you don't have any language issues like you would if you moved to Spain or somewhere else with a nice climate. As for working hours they have been much the same as the UK, everyone knows they will have to work.

 

 

What ..... You have to work in similar hours in Australia, I thought everyone was on part time, lol.

[VERYSTORMY]

Do you mean going to live in Spain and not be worse off. If that were possible I don't think people would bother making the huge trip to Aus. All the things you mention you would have to travel for, with the extra costs of getting to wherever.

 

Doubt if many come here for the desert but loads do come for the weather, beaches on the doorstep and you don't have any language issues like you would if you moved to Spain or somewhere else with a nice climate. As for working hours they have been much the same as the UK, everyone knows they will have to work.

 

I am not talking about moving to Spain. You can buy a decent little holiday pad there for peanuts these days. Jump on an easyjet flight on a friday night and have the weekend in the sun. I know several people that do it and rent it out during the week and it costs them nothing.

 

Alternative. Move to Oz and for a growing number of new people, they find themselves significantly worse off financially. They sell there house in the UK and find there now in there 30's in Oz and starting from scartch again with a large mortgage. Lets not forget, that people today are going to be looking at spending at least $400k for a house. If your earning the average wage of about $70k, that means the max mortgage you can afford is $210k based on 3x earnings. Thats means you need a deposit of $190k. That is probably more than most people can get in equity from their house in the UK. Or, if they can, they are still now back at day one of a 25 year mortgage.

[VERYSTORMY]

If I were you I would stay in the UK, it's still a great place to live, especially if you are lucky to have decent jobs and a good lifestyle. A lot of folk aren't this lucky though and Australia is a better option for them, that's why most of them who go say their lives have been enhanced, especially for their kids.

 

Problem is Hoff. There is a growing amount of tradies struggling for work here. When a lot of the guys who post on here arrived, life was very good. Loads of work, houses were cheap and so moving from the UK in a small / terrace house where they were struggling to keep regular work was a no brainer. But times have moved on. Houses have sky rocketed and a lot are going to arrive they cant afford to buy. Work is drying up by the day and cost of living means they have a worse lifestyle than they did back home.

 

For a long time now, there have been lots of construction work on FIFO for tradies building new mines and things. But, now projects are being canceled all over the place and more are coming back to Perth to look for work and so the number of job seekers is increasing, while work in Perth is decreasing

[OzDreamSeekers]

Whenever I hear how hard it is for someone financially I always recommend a small investment in a book called "The Richest Man in Babylon". It will be the best $10 you will spend.

It was written in the 1920's and holds some basic principles around how we use, treat and respect money/income. Follow those principles and reap the reward.

Happy to chat further with anyone who has read the book and still believes they have no way to afford to live. Life is about choices, some are harder than others, but they are still choices.

If we overspend when times are good, without preparing for when things aren't so good....is that someone else's fault?

If the choice you make doesn't work, make a new (different) choice.

Ax