Only 33% of Australians surveyed feel optimistic about their household finances in 2026, with more than three quarters (77%) of Australians saying they’ve changed their financial behaviour due to concerns about the economy.

The findings from global data and technology company, Experian, highlight growing financial strain across households as Australians adjust spending habits, dip into savings and increasingly rely on flexible payment options to manage rising costs.

“Consumers are becoming far more strategic in how they manage financial pressure,” said Barrett Hasseldine, Head of Data Science at Experian Australia & New Zealand.

“Rather than pulling back spending entirely, many households are reprioritising where money goes and using a mix of savings, spending choices and flexible payment options to manage cash flow.”

The Experian Spend Index Report combines consumer sentiment research with Experian data from millions of active credit users, revealing how financial pressure is reshaping consumer behaviour and spending patterns.

It found that almost three-quarters (72%) of Australians surveyed said their household savings had decreased in 2025, while 66% experienced financial stress amid ongoing economic pressure. Australians surveyed said they are also pulling back on discretionary spending, with the biggest cutbacks occurring across eating out (72%), spending on takeaway (61%), shopping and retail purchases (57%) and domestic travel and holidays (39%).

Essential spend and discretionary cutbacks

The cost squeeze is also extending beyond discretionary spending. According to Experian’s consumer survey, more than half (52%) of Australians said they had to dip into savings to manage rising expenses, while 42% delayed major purchases to stay on top of rising household costs.

Grocery costs emerged as the biggest source of household pressure, with 34% of Australians surveyed identifying groceries as the expense that increased the most over the past year, followed by housing costs, transport and utilities.

Flexible payment options

Financial pressure is also increasingly flowing through to household credit behaviour. Experian data shows more than one-third (36%) of Australians relied on credit to cover every day or essential expenses, while 37% used one form of credit to manage or repay another. Experian data also showed Buy Now, Pay Later (BNPL) spending rose 16% in 2025, highlighting growing reliance on flexible payment options as households managed tighter budgets. 

“Credit is not a simple good or bad story,” said Mr Hasseldine.

“For many households, it can help smooth timing gaps and preserve flexibility. The important question for lenders and consumer-facing organisations is how to recognise when customer circumstances are changing, where pressure may be building and how repayment behaviour may shift.”

Read the full report, The Experian Spend Index, here.