Page tools:
 Print Page
 Print All
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Household Expenditure Patterns by Life Cycle In 2003–04, Australian households spent $893 per week on average on goods and services. Spending varied according to the number of people in the household, and with other factors such as the income of the household and the age and life cycle stage of its members. This article explores the different spending patterns associated with four types of households considered representative of particular stages in the life cycle of couple families. The different spending patterns of these households provide some insight into the impact on the household budget of changes such as having children, paying off a home mortgage, children growing older then leaving home, and retiring from work. Proportional spending on housing generally falls over the life cycle, whereas proportional spending on food and non-alcoholic beverages tends to rise. In 2003–04, Australian households spent $893 per week on average on goods and services. Spending varied according to the number of people in the household, and with other factors such as the income of the household and the age and life cycle stage of its members. For example, people aged 65 years or older living alone spent $351 per week on average, whereas households comprising a couple with one or more dependent children and one or more non-dependant children spent an average of $1,537 per week.
SPENDING ON GOODS AND SERVICES BY HOUSEHOLDS - 2003-04
This article focuses on four types of households considered representative of particular stages in the life cycle of couple families, and illustrative of how household spending patterns tend to change as a household grows older. The four life cycle stages are represented by households comprising: a couple whose reference person is aged under 35 years, a couple with one or more children whose eldest child is aged under 5 years, a couple with one or more non-dependant children, and a couple whose reference person is aged 65 years or older. The different spending patterns associated with these four life cycle stages provide some insight into the impact on the household budget of changes such as having children, paying off a home mortgage, children growing older then leaving home, and retiring from work. Similar changes often affect the spending patterns of lone person and single parent households.
SELECTED CHARACTERISTICS OF SELECTED SINGLE FAMILY HOUSEHOLDS - 2003-04
PROPORTIONAL SPENDING(a) BY YOUNG COUPLE ONLY HOUSEHOLDS(b) YOUNG COUPLES In 2003–04, there were 425,000 households comprising a couple whose reference person was aged less than 35 years. These young couple only households had comparatively high mean weekly gross income ($1,589) and goods and services expenditure ($1,169). Their actual ($259) and proportional (22%) average weekly spending on current housing costs was well above the average among all Australian households ($144 or 16%). The increase in their proportional spending on current housing costs (from 17% in 1984) was also greater than the general increase among all households (from 13% in 1984). Levels of home ownership and public rental strongly influence current housing costs. In 2003–04, young couple only households had relatively low rates of outright home ownership (2% compared with 35% of all households) and of renting their home from a state or territory housing authority (less than 1% compared with 5%). Above average proportions were repaying a mortgage on their home (54% compared with 35% overall) and renting their home from a private landlord (37% compared with 21%). Young couple only households also allocated a greater share of their spending than other households to the acquisition of household furnishings and equipment, which is consistent with this life cycle stage being a time during which couples often give priority to establishing a family home. However, between 1984 and 2003–04, proportional spending on household furnishings and equipment fell by a wider margin among young couple only households (11% to 7%) than among all households (8% to 6%). Spending on transport and recreation was also relatively high for young couple only households. In 2003–04, average weekly spending per person on transport ($95) and recreation ($78) by young couple only households was higher than for all other selected life cycle groups. While high spending is enabled by high income, other characteristics could also provide a partial explanation for relatively high spending on transport and recreation by young couple only households. For example, in 2003–04, the average number of employed people per young couple household was 1.8, and the average age of the reference person in these households was 28 years. The relative youthfulness, high probability of being employed, and childlessness of people in young couple only households suggests greater likelihood of participation in activities such as recreation, and greater use of transport to travel to these activities and to work. The spending patterns of young couple only households tend to change with the arrival of children. While both household income and total household goods and services expenditure decrease on average, spending on some goods and services rises. PROPORTIONAL SPENDING(a) BY COUPLE WITH YOUNG CHILD(REN)(b) ONLY HOUSEHOLDS COUPLES WITH YOUNG CHILDREN In 2003–04, there were 427,000 households comprising a couple and one or more children whose eldest child is aged under 5 years. The average household size for this life cycle group was 3.4 people, and mean gross household income was $1,344 per week, lower than for young couple only households. At $1,071 per week, average goods and services expenditure was also lower than spending by young couple only households. To some extent, lower income and spending can be attributed to the reduced average number of employed persons in couple with young children only households compared with young couple only households (1.5 and 1.8 persons employed respectively). Although overall goods and services expenditure was lower, the extra people in the household were reflected in higher household spending on food and non-alcoholic beverages, medical care and health expenses, clothing and footwear, and domestic fuel and power. The biggest proportional difference between the two life cycle groups lay in their spending on household services and operation. Included in this broad expenditure group is spending on phone calls, child care, housekeeping, cleaning, gardening, and the repair and maintenance of household durables. Whereas young couple only households spent an average of $49 per week (4% of their total goods and services expenditure) on household services and operation, couple with young children only households spent $90 or 8%. No other life cycle group spent this much on this broad expenditure group in 2003–04. Compared with young couple only households, there was less spending by couple with young children only households on items of a more discretionary nature such as alcoholic beverages, transport, recreation, and household furnishings and equipment. Current housing costs were also lower. With the average age of the household reference person being older (34 years), a higher proportion owned their home outright (8%). Although a higher proportion also owned their home with a mortgage (62%), average mortgage interest payments were smaller as these households are generally likely to have bought their homes earlier for lower prices, and to have spent longer reducing the loan principal than more recent home buyers from young couple only households. COUPLES WITH OLDER CHILDREN All other factors being equal, reducing the amount of mortgage principal on the family home lowers mortgage interest charges which decreases proportional spending on current housing costs. In 2003–04, current housing costs represented just 9% of the total goods and services expenditure of households comprising a couple and one or more non-dependant children. These households tend to be considerably older than couple with young children only households, and have a much higher rate of home ownership. PROPORTIONAL SPENDING(a) BY COUPLE WITH NON-DEPENDANT CHILD(REN) ONLY HOUSEHOLDS In 2003–04, there were 446,000 couple with non-dependant children only households. The average age of their reference person was 57 years, and the majority (53%) owned their home without a mortgage. A further 38% were repaying a mortgage, while only 8% were renting their home. Their mean gross household income per week ($1,739) was higher than the average income of couple with young children only households. Higher household income is likely to be related to the different composition (e.g. number of income earners) and characteristics (e.g. age of members) of households representing these two life cycle stages. While average household size (3.3 people) was slightly smaller, the average number of members aged 18–64 years (2.9), and the average number of employed persons per household (2.1) was greater in couple with non-dependant children only households. In both 1984 and 2003–04, transport was the largest broad group of goods and services expenditure for this life cycle stage. In 2003–04, couple with non-dependant children only households spent an average of $237 per week on transport. This represented 20% of their total spending on goods and services. Increased household spending on transport is likely to be associated with having more pre-retirement age adults, and more employed people, in the household. Independent children living with their parents often purchase, operate and maintain a motor vehicle of their own to travel to work, education and social events. Couple with non-dependant children only households also spent proportionately more on food and non-alcoholic beverages, recreation, tobacco products, personal care, and medical care and health expenses than households representing the younger life cycle stages previously examined in this article. However, average per person spending was not necessarily higher. The only broad groups of goods and services expenditure on which couple with non-dependant children only households spent more per person were medical care and health expenses ($19 per week on average) and tobacco products ($7 per adult per week on average). OLDER COUPLES The share of the household budget allocated to the various broad expenditure groups differs when household income is substantially lower. Relatively low household income is often associated with relatively high proportional spending on more basic, less discretionary items. The age of household members also influences spending requirements and preferences. In 2003–04, there were 658,000 households comprising a couple whose reference person was aged 65 years or older. These older couple only households had an average of 0.2 employed persons, and 68% of them relied on government pensions and allowances as their principal source of household income. This rate of income support was much higher than prevailed among the three younger life cycle groups examined in this article (all less than 12%). Consequently, older couple only households had comparatively low gross income ($620 per week on average). Their total spending on goods and services was also much lower (at $615 per week on average) than households representing the three younger life cycle stages. PROPORTIONAL SPENDING(a) BY OLDER COUPLE ONLY HOUSEHOLDS(b) Compared to couple with non-dependant children only households, older couple only households spent a similar share of their goods and services budget on current housing costs. This was despite their considerably higher rate of outright home ownership (86% compared with 53%) and their much lower average weekly spending on current housing costs ($61 compared with $110). Similar proportional spending by older couple only households largely reflects their relatively low income covering the numerous fixed housing costs payable by home owners. Such fixed costs include water and sewerage rates and charges, local government rates, house and contents insurance, repairs and maintenance, and body corporate payments. Unlike other selected life cycle groups, proportional spending on current housing costs by older couple only households decreased between 1984 and 2003–04. Over the same period, their proportional spending on recreation increased by a greater margin (from 12% in 1984 to 16% in 2003–04) than it did for other selected life cycle groups. In 2003–04, older couple only households spent proportionately more on food and non-alcoholic beverages (21%) than any other selected life cycle group. However, actual spending per person on food and non-alcoholic beverages was similar in older couple only households to what it was in couple with non-dependant children only households. Older couple only households also spent proportionately more than couple with non-dependant children only households on domestic fuel and power, household furnishings and equipment, household services and operation, medical care and health expenses, and recreation. Of the four life cycle groups examined in this article, older couple only households were the group that spent proportionately the most on recreation (16%), medical care and health expenses (8%), and domestic fuel and power (3%). They were also the life cycle group that spent proportionately the least on transport (15%), miscellaneous goods and services (7%), clothing and footwear (3%), and tobacco products (less than 1%). ENDNOTES
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
