The cost-of-living crisis has “fundamentally reshaped” our relationship with food, social connection and small pleasures.
In an article released today, RMIT University researchers Meg Elkins and Lisa Farrell say that Australians are not just cutting back on large discretionary items like cars.
“The impact of inflation on household budgets has fundamentally reshaped our relationship with food, social connection and small pleasures,” they argue in a paper published by The Conversation.
“The current cost-of-living crisis can also create new spending habits. The ways we restructure our budgets can have lasting effects on our lives and local economies.”
The authors say these trends have the potential to permanently alter the way Australian households budget.
Consumers have “price anchors” from before the latest inflation hike that influence what they think something should cost.
For example, a coffee was about $3.80 coffee five years ago but then rose to $5.50 and as high as $7 in some places now.
“If you are used to paying $5 for a daily coffee, any price above this is beyond what you see as reasonable value for money,” the article says.
“Look at parents at weekend sports matches. You’ll notice the increasing presence of the insulated mug full of homemade coffee, replacing the takeaway coffees from the local cafe.”
Dr Elkins and Professor Farrell say that during an inflation-fuelled cost-of-living crisis consumer face financial strain and “decision fatigue” from constant price revaluations.
“This cognitive burden emerges as mental exhaustion when making even routine purchases,” they argue.
“Increasing pressure on our finances can trigger a scarcity mindset that consumes our thinking and affects our decision making.
“Our focus shifts to immediate needs, such as paying weekly grocery bills, instead of long-term financial planning for a holiday or retirement.”
The article says these change spending habits have implications for our social connections.
Takeaway nights were an important part of community and social connections.
“The so-called third place is the place between work and home where you can be part of the community,” the paper says.
“If the little pleasures we consume as a daily or weekly ritual become luxuries, this can increase the loss of the third space.”
The full article can be found on The Conversation website.
