How Australians are stretching their salaries in 2026

18 September 2026

If you've been paying closer attention to your spending lately, you're not alone.

The 2026 Smart Cost of Living Report, based on a nationally representative survey of more than 2,000 working Australians, found that nine in 10 working Australians surveyed have cut back spending in the past six months as they navigate ongoing cost-of-living pressure.

For many of these households, it's not just about spending less. It's about finding smarter ways to make their salary go further.

Where Australians are finding savings

When budgets get tighter, discretionary spending is often the first place people look to cut back. Among the 2000+ working Australians who participated in the Smart survey, 88% have cut spending in the past six months due to cost-of-living pressure.

The Smart Cost of Living Report reveals that dining out, takeaway meals, holidays and travel are the most common areas where survey respondents have reduced spending over the past six months. Spending cuts on entertainment, clothing and shoes also feature prominently.

Many people we surveyed also expect those trends to continue, with more than half planning to further reduce spending on dining out and holidays over the coming months.

Everyday essentials remain a concern

While our research shows many Australians have already adjusted their spending habits, concerns about rising costs remain.

Looking ahead at the costs workers are most worried about for the remainder of 2026, grocery prices were the biggest concern for workers in our survey (62% extremely or very concerned), followed by electricity (59%) and petrol prices (53%).

Households are looking for additional ways to manage their budget, beyond simply cutting discretionary spending.

Looking beyond spending cuts

There's only so much you can cut back before it starts impacting your lifestyle. 

That's why many Australians are focusing on the other side of the equation: increasing their take-home pay. 

In fact, 98% of workers in our survey said maximising take-home pay and reducing tax are important priorities when it comes to remuneration.  

For eligible employees, salary packaging could be one option to stretch your salary further. Depending on your employer and circumstances, salary packaging may help reduce your taxable income and increase your take-home pay. 

For Australians considering a new car, a novated lease could also help reduce the overall cost of ownership. With a novated lease, you could use pre-tax dollars on the lease payments and running costs such as registration, insurance, servicing and fuel, which the costs bundled into one regular payment deducted from your salary each pay day.