The Burrow

There’s no doubt that in the face of the global pandemic, Australians have had to deal with a lot of hardship. With lockdowns and uncertainty, many are doing it tough, especially in regard to their finances.

Even though the employment prospects for most Australians are solid, we still find it challenging to pay our bills from time to time, with the shock of the unexpected high bill still catching us out.

In recent Compare the Market research, it’s shown that Australians are facing the most shock when they receive their electricity and gas bills. The new CTM Bill Shock Tracker1 data for August 2021 has revealed that out of a pool of 1,501 respondents, 47% of respondents said they had been bill shocked. Of those who had been shocked by a bill, 81% said they were recently shocked by their electricity/gas bills. Additionally, nearly 39% of all respondents said that they experienced stress regarding these bills.

The below table highlights the top bill categories for those who admitted to forgetting a bill, receiving an unexpected bill, or receiving a bill shock. Car registration, council rates and streaming services were top of the list of bills people forget about most. When asked about unexpected payments, the most significant bill was vehicle repairs, which came out on top, followed by medical expenses and home repairs.

While Australians feel mostly comfortable keeping on top of expenses (43%), they also cut back on certain activities/luxuries to make sure they keep on top of their bills (51%).1

Of those who said they had to cut back in the last 3 months to afford a bill, they were cutting back on eating out and takeaway food (77%) followed by grocery shopping (53%) and entertainment and family activities (51%).1

bill shock woman financially stressed

The survey showed that many Australians feel like their bills have increased recently (64%), and just over half of the 1,501 respondents have shopped around for a better deal (54%).1

With bill shock generating financial stress, it can easily leak into everyday lives which can then affect relationships. This was shown with 28% of all respondents to the Bill Shock survey stating that they have argued over money matters with partners or family in the last three months.1

Despite these stressors, it seems that most Australians are staying resilient in finding their way through financial uncertainty. Cutting back in certain areas of spending appears to be the way to overcome some of these bill shocks for now.

Simon Downes, Compare the Market spokesperson, says that while it’s tough now if Australians are prudent and understanding of their financial situation, the shock of large bills can be reduced.

“If you try to live within your means and save on items and services where you can, bill shock like what we’re currently getting may be better managed.

“Shop around where you can, compare where you can, you might be surprised at what you find. Different energy providers, for example, are as different as apples and oranges. The cost of energy can vary hugely between different plans, for what is effectively the same product coming down the same poles, pipes and wires in your street.”

Ways to save so your next bill is less of a shock

  • See if you can set up monthly energy bill payments rather than quarterly bills. Smaller monthly payments will come as less of a shock and should avoid budget blow-outs.
  • Review your bank statements and write down a list of all your ongoing expenses. Put the list on the fridge so you don’t overlook upcoming bills.
  • Open a linked bank account and put aside a set amount of cash each payday to cover larger than expected bills or other expenses when they come up.
  • Clear your buy now pay later charges and any other smaller debts as soon as you can, when you have the money available, rather than waiting for the due date.

 

Sources

1 Compare the Market Bill Shock Tracker, Compare the Market, Accessed September 2021.