Despite bringing in six figures together, Toby and Leanne say they still struggle to make ends meet.
Despite bringing in six figures together, Toby and Leanne say they still struggle to make ends meet.

We ‘struggle to make ends meet’ on $215k

LIVING in Townsville, 40-year-old Toby* and his wife Leanne* have worked hard to provide a comfortable lifestyle for their young family of three.

As parents of an eight-year-old son, their gross income is more than $215,000 a year, a figure more than $100,000 above the national household average.

But Toby, a finance manager, and Leanne, a teacher, say it's just not enough.

According to McCrindle research, the average household earns just under $110,000 per annum, while the top one in five earn more than twice this (exceeding $260,000).

On the other end of the spectrum, the bottom one in five take home around one-fifth of the average (a little over $23,000).

But despite their above average income, and living in a regional centre, Toby says they still "struggle to make ends meet".

"I am $80k net and my wife is $75k net," he told news.com.au for Cash Confessions, where we ask Australians how much they earn and track how they spend it over a month.

"Which doesn't feel like a huge income … and we aren't able to save much at all … only around $5950 each year.

"Everyone has different circumstances, but we do not live a life of luxury. There's no big holidays, or boats or houses. Our biggest expenses are education for our son, transportation and our personal loans each month."

Toby and his wife say they don’t live outside their means, such as only spending $40 a month on coffee, but still struggle on a $200,000 income.
Toby and his wife say they don’t live outside their means, such as only spending $40 a month on coffee, but still struggle on a $200,000 income.

As a financial manager, Toby keeps a tight grip on his family's expenditure each month to ensure they don't dip into the red. But it's the repayment of their $100,000 personal loan that hits their hip pocket the hardest each week. This includes paying off $46,000 on a Subaru Forrester bought in 2016, and $38,000 on a Hyundai i40.

"We pay $1000 each fortnight for the personal loan," he said.

"The loan includes the cars, piano and some holidays."

In August, it was revealed Australians had borrowed $46.6 billion in personal loans over the past 12 months.

RateCity analysed Australian Bureau of Statistics data from the past year and found personal loan numbers were up 6.4 per cent year on year, with more than half a million Australians using them to buy cars in that period. The total borrowing for new cars was $8.33 billion at an average loan size of $36,341. A further $5.88 billion was borrowed for used cars.

On top of this, we borrowed $6.05 billion for debt consolidation and $2.54 billion for household goods, but despite the huge outlay, many borrowers are confused about how personal loans work and why they may not be offered the low interest rates they see on advertisements.

Despite bringing in six figures together, Toby and Leanne say they still struggle to make ends meet.
Despite bringing in six figures together, Toby and Leanne say they still struggle to make ends meet.


According to RateCity chief executive officer Paul Marshall, personal loans are often awarded through risk-based pricing, which means the lender assesses the loan applicant before determining approval and offering an interest rate.

Other major personal loan borrowings over the year were $2.54 billion for household goods; $826 million for travel and holidays; $759 million for boats, caravans and trailers; and $409 million for motorcycles and scooters.

Along with the loan, Toby says they choose to spend more on rent as to live in a larger home in Townsville.

"Rent is quite expensive," he said. "We spend $600 a week and the average would be around $400.

"There is a lot of crime up here, and we wanted to be in a nicer area. So it's a five-bedroom house with a pool on the golf course. But we can't afford to buy … we don't even have a deposit. While we would like to one day, we don't know where to cut expenses. Education ($866/month) is important to us.

While two cars was a big drain on their annual incomes, Toby said the household couldn't function with one.

Each month, the pair will spend close to $2000 each month on repayments, fuel, registration, insurance and servicing for their fleet.

According to 2016 research, Australian households are now spending up to $22,000 a year just to keep their cars on the road.
According to 2016 research, Australian households are now spending up to $22,000 a year just to keep their cars on the road.

According to a 2016 study by the Transport Affordability Index by the Australian Automobile Association, Sydney households face the highest transport costs of any city in Australia - both in dollar terms and as a percentage of household income.

The study revealed households were now spending up to $22,000 a year just to keep their cars on the road as toll ways, insurance and other costs continue to rise.

According to the research, a two-car household faces transport costs of $419 per week in Sydney, versus $376 in Brisbane and $348 in Melbourne.

MORE: Sydney mum says she struggles on $170k income

But in the city where critical decisions on transport funding is made - the national capital, Canberra - the average weekly cost to run a car is $299, ranking it among the cheapest in the country.

But despite the expense, Toby said his family had no other choice.

"We really need two cars," he explained.

"My wife needs one for her work … and I need one to drop off and pick up our son and for work.

"They are a big hole for us … but everyone has different circumstances."

Care to confess your monthly spending habits? Are you a savvy saver who knows how to spend smart? Email vanessa.brown@news.com.au



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