What costs Aussies can't go without

New NAB research on consumer spending shows Aussies are prioritising spending on their kids and pets but are happy to cut back on discretionary costs like eating out or going to the movies.

Around 2000 Australians were surveyed by the bank which found 55 per cent of respondents are happy to cut back on eating out at restaurants or takeout.

Another 50 per cent were happy to reduce spending on “micro treats” like coffee before work or buying lunch.

Next on the chopping block were trips to the movies or other entertainment costs – 49 per cent – and Aussies were driving less to save on petrol – 45 per cent.

Holidays also dropped to the bottom of the wish list with 43 per cent of respondents deciding to cut back on trips.

Instead, Aussies are prioritising paying expenses for their kids and pets.

Children’s private school fees remained a priority among 10 per cent of respondents and hobbies like sport were also a non-discretionary spend for 12 per cent of respondents.

Even pets topped the priority list with 18 per cent of respondents happy to keep forking out for their fluffy friends.

Insurance of all varieties from health, home and car remained top of the list for 21 per cent of respondents.

“Despite feeling the pinch, people are making cutbacks on things like coffee and cinema outings, so they can still dedicate funds to their kids and pets,” NAB Head of Everyday Banking Claire Righetti said

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“Australians are becoming more ‘considered consumers’ and saving an average of $286 each month through small thoughtful cutbacks – it means they can still spend on those things that really matter – for some people it’s the family pet and for others it’s getting extra help around the home.”

The survey found people aged 50 to 64 are making the most significant savings from cost cutbacks particularly when it comes to trading off major household purchases or going on holiday.

Aussies aged 18 to 29 are saving more by spending less on private tutors and school feeds, pets and giving to charities.

For the next 12 months, the research found most Australians are “very pessimistic” and will continue to be conservative when spending on major household items and holidays.

It comes as interest rates have been consistently raised by the Reserve Bank of Australia in a bid to fight inflation back to a 2 to 3 per cent target from the current 7 per cent.

The cash rate sits at 4.1 per cent adding thousands of dollars a month to the average Aussie mortgage holder’s repayments.

But the rising interest rates might not yet be over with the RBA governor flagging the potential for more rate hikes in coming months if inflation isn’t controlled.

The high inflation is adding pressures to other household expenses like groceries, power prices and transport costs leading to larger bills for household budgets.