The cost of everyday essentials has crept up again. For single-income families like ours who live on a tight budget, this rising cost of living feels like a punch to the wallet. We need to stretch our paychecks and pay rent while trying to keep the fridge stocked. It’s no wonder so many of us are feeling the pressure.
I went out for a grocery run today and was caught off guard by the prices! I only bought milk, bread, sugar, yoghurt, and a tray of eggs, but somehow my total was higher than usual. And don’t even get me started on the power bill last month! Outrageous doesn’t even begin to cover it.
If you’ve also found yourself holding your breath at the checkout, there are ways to stay ahead. This guide is packed with practical tips to hopefully ease a bit of the pressure on your day-to-day spending. Let’s dive in.
FAQs about the Cost to Live in Australia in 2025
The Australian Bureau of Statistics regularly releases updates to selected living cost indices, and the media is constantly buzzing about inflation. The rising cost of living is something almost every household feels right now. But just because everything costs more doesn’t always mean we’re living better.
What Is the Difference between Cost of Living and Standard of Living?
The cost of living refers to how much you need to get by, such as rent, groceries, and bills. This year, we’re seeing a higher cost of living due to ongoing inflation, increased interest rates, and global factors such as supply chain disruptions. Throw in mortgage repayments rising thanks to a stubbornly high cash rate, and it’s no surprise that many Australians are struggling to make ends meet.
The standard of living is how comfortable or enjoyable life is. Are you getting time off? Understanding the difference between what things cost and how you actually live can help you feel a little less stressed about that next power bill.
How Much Has the Cost of Living in Australia Increased Since 2024?
According to the Australian Bureau of Statistics, the cost of living in Australia jumped sharply between 2024 and 2025. The CPI rose again in the September 2024 quarter, mainly due to increases in utility costs, mortgage interest charges, and the price of petrol.
The average cost of living for a typical employee household is now significantly higher than it was in 2023, adding more pressure on household budgets.
How Does the Consumer Price Index (CPI) Affect the Rising Cost of Living?
The consumer price index (CPI) tracks the price index of everyday goods and services, including groceries, rent, and utility bills. It’s a key way economists measure inflation. If the CPI goes up, that’s a sign the cost of essentials is climbing, and that’s exactly what’s been happening. In the June 2024 data, the CPI saw another bump, pointing to ongoing rising inflation in Australia.
Why Interest Rates and Mortgage Costs Keep Rising
The Reserve Bank of Australia has been raising interest rates to try and slow down inflation, but it’s making life tougher for anyone with a mortgage, especially on a variable rate.
Mortgage interest charges have been one of the biggest contributors to the cost of living hike in the past year. For single mums with a home loan, the rising costs can feel relentless, and budgeting around them is no easy task.
Is Rent in Australia Also Going Up?
Yes, rent in Australia continues to climb. The housing market remains tight, and housing affordability is a growing concern. For those not paying a mortgage, housing costs are still painful.
What's the Role of Inflation in the Rising Cost of Living?
Inflation is what happens when prices rise across the board, reducing the purchasing power of your income. It’s one of the core drivers of the cost of living increases we’re seeing. Global factors, like Russia's invasion of Ukraine and lingering supply chain issues, have contributed to rising food, fuel, and utility prices. And unfortunately, rising inflation doesn’t look to be easing anytime soon.
Average Cost of Living: What Are We Paying Now?
Let’s talk real numbers. The average cost of living for a small household in 2025 now includes utility bills upwards of $300 a month, weekly grocery costs nearing $200, and childcare fees that continue to rise despite some subsidy support from the Australian government. That's the reason why the current cost of living continues to bite, especially for families living on a single income.
How Does Wage Growth Stack Up Against the Rising Cost of Living?
Here’s the kicker: wage growth hasn’t kept pace with rising cost of living pressures. While some industries have seen modest increases in income, most households are still finding it harder to stretch their paycheques across the month. The CPI keeps climbing, but wages? Not so much. This gap is a key reason why so many people are facing financial hardship right now.
What Can You Do to Cope with the Rising Cost of Living?
The silver lining is, you’re not powerless. Here are five easy steps to help you stay on top of the cost of living without sacrificing your sanity.
1. Track Every Dollar
It doesn’t have to be fancy. Just jot down what’s coming in and what’s going out, like rent, groceries, school stuff, the lot. Apps like MoneySmart’s Budget Planner or even a notebook can help. Once you see where your money’s going, it’s easier to spot what can be trimmed.
2. Shop Smart and Plan Ahead
Write out what you’re cooking for the week and shop with a list. How to save money on groceries? Look for specials, buy in bulk when it makes sense, and consider swapping to home-brand items (they’re often just as good!).
3. Claim What You’re Entitled To
Check what support you're eligible for, such as Centrelink payments, childcare subsidies, rent assistance, or energy bill relief. Services Australia and your local council are good places to start.
4. Cut Back Without Missing Out
Entertainment doesn’t have to cost a fortune. Free local events, library storytimes, beach days, or movie nights at home can still be fun.
5. Build a Rainy Day Buffer (Slowly)
Even if it’s just $5 a week, tuck something away when you can. Use a separate account so you’re not tempted to touch it. That little cushion can be a lifesaver when the unexpected pops up.
Final Thoughts: The Rising Cost of Living in Australia
I know how exhausting it is trying to do it all when living cost pressures feel like they’re coming from every direction. I see you, Mama.
Budgeting apps, cost-sharing arrangements, and utility comparison tools can all help. Some banks even offer relief on mortgage payments or switch you to a better variable rate. If you’re struggling to make ends meet, reach out to local support networks. Sometimes even a small change, like meal prepping or reviewing your energy plan, can make a difference.
You’re not alone in this. Many of us are walking this same tightrope, juggling rising mortgage bills, childcare, and the ever-changing cost of essentials. Be kind to yourself, and remember, even small wins count.
