Nearly half of Australians expect their finances to either stay the same or get worse in 2026, according to a recent YouGov survey. That means a huge number of people are bracing for another year of tight budgets, rising costs, and tough choices about what to cut. For someone earning the median Australian salary of around $68,000, a year of stagnant or declining finances can mean the difference between building a savings buffer and falling further behind on everyday bills.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The gap between those who feel in control and those who don’t comes down to more than just income. The same survey shows that younger Australians are far more likely to have a budget in place, while over half of those aged 55 and older don’t use one at all. That pattern suggests the problem isn’t just about how much money comes in — it’s about what happens to it once it arrives. Here’s what you actually need to know.
The central concept here is budgeting method — the system you use to track where your money goes. It’s not about how much you earn. It’s about whether you have a reliable way to see your spending, compare it to your income, and adjust before you run into trouble.
How budgeting tools and age shape financial outcomes
The YouGov data reveals a clear split in how Australians manage their money. Manual tools like spreadsheets remain the most common method at 45%, but usage varies dramatically by age. Among 25–34 year olds, 45% use a budgeting app and another 45% use their bank’s financial management service. Among those aged 55 and older, only 11% use a budgeting app.
That gap matters because the tool you use determines how often you actually look at your finances. A spreadsheet you update once a month gives you a very different picture than an app that sends you a notification when you’re about to overspend on groceries. The survey found that 84% of 25–34 year olds have a budget for 2026, compared to just 51% of those aged 55 and older. The age group with the most budgeting tools is also the age group most likely to have a budget at all.
What I tend to notice is that people often blame their income when the real issue is visibility. If you don’t know where your money went last week, you can’t make a meaningful plan for next month. The data backs this up: among those expecting finances to worsen, 63% plan to cut spending on eating out, but only 20% plan to cut housing or bills. Without a clear picture of actual spending, people cut the most visible expenses rather than the biggest ones.
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| Age group | Have a budget for 2026 | Expect finances to improve |
|---|---|---|
| 18–24 | 62% | 63% |
| 25–34 | 84% | 70% |
| 35–44 | 78% | 62% |
| 45–54 | 59% | — |
| 55+ | 51% | 13% |
Where the budgeting system breaks down
The survey points to several places where the gap between intention and action costs people real money. These aren’t random mistakes — they follow clear patterns in the data.
Cutting the wrong categories first
When people expect their finances to worsen, they tend to cut spending on eating out (63%), clothing (62%), and everyday conveniences like takeaway coffee (55%). But only 20% plan to cut housing or bills. The problem is that housing is typically the largest single expense for most Australian households. Cutting a few coffees a week saves maybe $20. Renegotiating your internet plan or switching energy providers can save $50 a month or more. The data suggests people are making cuts that feel good in the moment but don’t move the needle on their actual financial position. If you’re looking for ways to reduce costs, it’s worth exploring how to negotiate better deals on everything — starting with your biggest bills.
Not using the right tool for your habits
Spreadsheets work well for people who enjoy tracking every dollar manually. But 45% of Australians use them, and only 28% use a budgeting app. If you’re the type of person who forgets to update a spreadsheet after three days, an app that syncs with your bank account automatically will give you a far more accurate picture. The survey shows that 45% of 25–34 year olds use budgeting apps, compared to just 11% of those aged 55 and older. That’s not because older Australians don’t need the help — it’s likely because they haven’t tried a tool that fits their habits.
Assuming improvement will happen on its own
Among those who expect their finances to improve, 29% plan no increase in spending in any area. That’s not necessarily a problem — but it suggests a passive approach. Improvement usually requires either earning more, spending less, or both. If you’re not actively changing anything, it’s hard to see how your financial situation shifts. The most optimistic age group, 25–34 year olds, are also the most likely to have a budget. That’s not a coincidence. Having a system in place gives you a realistic view of whether things are actually getting better.
Ignoring the grocery bill
40% of those expecting finances to worsen plan to cut spending on groceries. That’s a higher proportion than those cutting housing or bills. But groceries are a recurring expense that’s easy to trim in small ways — switching to home brands, meal planning, or buying in bulk. The survey also shows that 32% of those expecting finances to improve plan to increase spending on groceries, suggesting they see food as an area where quality matters. The difference isn’t about how much you spend on food — it’s about whether you’re spending it intentionally. A simple grocery budget planner notebook can help you track what you actually buy versus what you planned to buy.
Building a system that actually works for you
The data makes one thing clear: having a budget is strongly linked to feeling in control. But not all budgets are created equal. The method you choose needs to match how you actually behave with money.
Choose a tool you’ll actually use
If you’re the type of person who opens a spreadsheet once and never looks at it again, a budgeting app that sends push notifications will work better. If you prefer to see everything laid out manually, a spreadsheet or a paper ledger might be fine. The key is to pick something and use it consistently. The survey shows that 45% of Australians use spreadsheets, but only 28% use a budgeting app. Neither is inherently better — but the best tool is the one you don’t abandon after two weeks. For those who want professional guidance on structuring their finances, services like JustAnswer Finance can connect you with experts who help with budgeting, debt, and investing questions.
Track the big categories first
Most people focus on small discretionary spending — coffee, takeaway, subscriptions. But the data shows that only 20% of those expecting finances to worsen plan to cut housing or bills. Start with your three biggest expense categories: housing, transport, and food. If you can reduce those by even 5%, the impact is larger than cutting every coffee for a month. For example, if your rent is $2,000 a month, a 5% reduction saves $100. That’s the same as cutting 20 coffees at $5 each.
Review your budget at least monthly
The survey found that 84% of 25–34 year olds have a budget, but it doesn’t say how often they check it. A budget you set in January and forget about by March is useless. Set a recurring calendar reminder to review your spending against your budget every month. If you’re consistently overspending in one category, adjust either the category or your behaviour. If you’re consistently underspending, redirect that money to savings or debt repayment. The goal is to make the budget a living document, not a one-time exercise.
Plan for the future, not just the present
Among those expecting finances to improve, 21% plan to increase spending on holidays and 30% plan to increase spending on wellness. That’s fine if those increases are funded by actual income growth. But if you’re cutting groceries to afford a holiday, you’re not improving your financial position — you’re just shifting money around. A good budget accounts for both short-term wants and long-term goals like retirement. If you’re unsure how your current spending affects your retirement, it’s worth checking whether your super is secretly sabotaging your retirement.
What’s changing in 2026
The survey was conducted in late 2025, so it captures expectations for the 2026 financial year. Several factors could shift these numbers: interest rate decisions by the Reserve Bank of Australia, changes to the stage 3 tax cuts that took effect in July 2024, and ongoing inflation in housing and energy costs. If you’re in the 28% who expect finances to worsen, the most practical move is to lock in your budget now, before any rate changes or cost increases hit your bank account. Waiting until you feel the pinch means you’re reacting instead of planning.
What’s the best budgeting method for someone who hates spreadsheets? ▾
I’m over 55 and don’t have a budget. Is it too late to start? ▾
Should I cut my grocery budget or my eating out budget first? ▾
I expect my finances to improve. Should I increase my spending? ▾
What if I can’t stick to any budgeting method? ▾
How do I know if my budget is working? ▾
The real cost of not having a system
The survey data tells a consistent story: the people who feel most in control of their finances are the ones who have a system for tracking them. The 28% of Australians who expect their finances to worsen are also the ones least likely to have a budget in place. That’s not a coincidence — it’s a pattern. Without a system, you’re guessing. And guessing usually means cutting the wrong things, missing the biggest expenses, and hoping things get better without actually changing anything.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Stop Living Paycheck to Paycheck: Practical Strategies for Aussies.
Sources and Further Reading
Smart Spending Habits: Reclaim Your Finances and Live a Richer Life in Australia — Practical tips on aligning your spending with what actually matters to you.
Inflation’s Impact: How to Protect Your Aussie Wealth from Rising Costs — How to adjust your budget and investments when prices keep climbing.
YouGov (2025). Australian Financial Outlook 2026: How consumers plan to budget, save and spend. 🔗
