Why Does Our Household Still Feel Broke? 7 Places to Look Before Cutting Everything Fun
Cost of living in Australia
If you have ever looked at your income and thought, "We actually earn decent money... so where the hell is it all going?" - this is for you.
I am hearing versions of this conversation all the time. Families earning decent incomes are finding there is less left after the mortgage, groceries, insurance, school costs, cars and everyday life.
The answer is not automatically to stop buying coffee or remove everything enjoyable. Start by understanding where the biggest chunks of income are going - and whether any can be improved.
First, work out how much of your income is already spoken for
Start with your average monthly take-home household income, then calculate how much goes towards your mortgage, other debt repayments, essential household expenses and regular commitments such as childcare or school fees.
If your household brings home $10,000 per month and $3,500 goes to the mortgage, $1,000 to car finance and credit cards, and $3,000 to groceries, utilities, insurance and school or childcare costs, around 75% is already committed before everything else.
Suddenly, "We earn $10,000 a month - why do we still feel broke?" makes a lot more sense.
For context, in 1999 Australian owners with a mortgage spent an average of around 16% of income on housing costs, and 18% spent more than 30%. Today, the RBA says scheduled mortgage and consumer-credit repayments take just under 12% of household disposable income across the whole economy, including households without a mortgage.
The measures differ, but the point is simple: if your mortgage takes 30%, 40% or more of take-home income, it makes sense that the rest can feel squeezed.
The easiest way to understand where your money is going
Do a 90-day money check rather than building a giant spreadsheet. Download the last three months of transactions and group them into five broad buckets:
Committed: mortgage, childcare, school fees, insurance
Essential: groceries, utilities, fuel, medical
Debt: credit cards, car finance, personal loans, BNPL
Lifestyle: eating out, subscriptions, shopping, entertainment
Irregular: rates, rego, servicing, repairs, holidays, Christmas
Then divide annual or quarterly costs by 12. If school costs are $6,000 a year, they are really a $500-per-month household expense even if the bill does not arrive monthly.
Let’s make it easier
Do not categorise every $7 purchase perfectly. Find the big things first. Banking apps can help identify recurring merchants and categories.
AI can help organise the numbers too. Remove names, account numbers and identifying information first, then give it dates, categories and amounts and ask it to identify the biggest recurring costs.
Start by knowing.
1. Start with your mortgage
For most homeowners, this is the biggest regular expense. Find four numbers: loan balance, interest rate, minimum repayment and remaining term. Then send them to your broker.
You do not need to compare lenders yourself. At Rockett Finance, we can compare your current loan, what your lender may offer and whether another option would genuinely leave you better off.
2. Look at the debts sitting around the mortgage
Credit cards, personal loans, car finance and BNPL can quietly consume cash flow. Write down each balance, rate and monthly repayment, then identify the highest-rate or biggest-repayment debts.
Some homeowners may be able to consolidate higher-interest debts into their home lending. But turning a five-year debt into a 30-year debt can cost more over time, so keep a clear repayment plan.
3. Does your loan term still suit this stage of life?
Sometimes the pressure is temporary: reduced work hours, private school fees, parental leave, a new business or unavoidable expenses.
Extending the home-loan term may reduce the required monthly repayment and create breathing room, but can mean more interest over time. Review the strategy again when income improves or the temporary expense reduces.
Ask: "Is this pressure temporary, or is this our new normal?"
4. Review the bills you have stopped questioning
Insurance, internet, phone plans, health cover and subscriptions can creep up. Choose one annual household review day and focus on the recurring costs that are actually worth your time.
5. Stop letting predictable bills surprise you - and automate them
Rates, rego, school costs, insurance renewals and car servicing are not really unexpected. Add your major annual expenses together and divide them by 12. If they total $12,000 a year, your household needs to allow around $1,000 a month.
Then automate it. Schedule transfers each payday or month so the money moves aside before everyday spending gets hold of it, and automate regular bills where practical.
If you have an offset account, you may be able to keep this money there until needed, helping reduce mortgage interest. The goal is not 15 accounts - it is to make the important things happen automatically.
6. Look for quiet spending creep
A subscription here, more takeaway there, a membership no one uses. Start with recurring transactions and find the three expenses offering the greatest saving for the least sacrifice.
7. Work out whether the squeeze is temporary or structural
A temporary squeeze might come from parental leave, school fees, reduced hours or repairs. If the household is consistently spending more than it earns with no obvious end point, borrowing more may simply make the problem bigger.
Finance can create breathing room. It cannot permanently fix numbers that never balance.
Before investing or chasing the next goal, build yourself a buffer
Once you have tidied up the household finances, prioritise a savings buffer. Cars break, hot-water systems die and unexpected time off happens. Without a buffer, those costs often go straight back onto a credit card or personal loan.
You do not need $30,000 tomorrow. Start with enough for one significant unexpected bill, then one month of essential expenses, then build from there.
For homeowners with an offset account, keeping the buffer there can keep it accessible while helping reduce mortgage interest.
Once you have breathing room, ask: "What do we want the next spare dollar to do?" That might be paying the mortgage faster, investing, travelling, renovating or another goal.
Financial security starts with having enough room to absorb life when it does not go to plan.
Do This Task: Your 20-minute household money checklist
Download 90 days of transactions.
Find your five biggest spending categories.
List every debt balance and repayment.
Find your mortgage rate and remaining term.
Add annual expenses and divide them by 12.
Automate predictable bills and savings.
Work out what percentage of income is already committed.
Identify the three biggest areas you can realistically influence.
You do not need the perfect spreadsheet. You just need enough clarity to know what to do next.
How we at Rockett Finance can help
If your household feels tighter than it should, you do not necessarily need to start by cutting everything enjoyable. Sometimes the bigger opportunity is in the structure.
At Rockett Finance, we can review your home loan, other debts and goals, then do the legwork to compare repricing, restructuring, refinancing or leaving the current loan as it is.
Ready to see whether your home loan could be working better for your household? Contact Tara and the Rockett Finance team for a home-loan review.
Book an Appointment with Your Broker
Schedule an appointment with your broker (that’s us!) to determine your eligibility and deposit requirements.
We’ll calculate how much you can borrow based on your budget, income, and expenses.
Remember, it's never too soon to engage your broker.
We’re here to help you from the beginning, and our appointments are complimentary!
Your Broker,
Tara
Frequently Asked Questions (FAQs)
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Start with your biggest recurring costs first: your mortgage, other debts, insurance, utilities and major annual bills. Reviewing the largest expenses can have a greater impact than focusing only on small everyday purchases
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Potentially. If you have sufficient equity, borrowing capacity and meet lender requirements, some debts may be able to be consolidated into your home lending. This can reduce monthly repayment pressure, but the debt should be structured carefully so short-term debt is not unnecessarily stretched across a long mortgage term. Book a Mortgage Review
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There is no single number that suits every household. A practical approach is to first build enough to cover one significant unexpected expense, then work towards around one month of essential household costs before gradually increasing your buffer.
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The article uses official ABS and RBA figures for context. Re-check these immediately before publication and update the wording if newer official data materially changes the story.
ABS Australian Housing Survey 1999: owners with a mortgage spent an average of $206 per week, around 16% of income, on housing costs; 18% spent more than 30% of income on housing. Source: Australian Bureau of Statistics, Australian Housing Survey - Housing Characteristics, Costs and Conditions, 1999.
RBA Statement on Monetary Policy, August 2026: scheduled mortgage and consumer-credit payments increased to just under 12% of household disposable income in the June quarter, close to their 2024 peak. Source: Reserve Bank of Australia, Financial Conditions.