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If you\u2019ve spent any time around the Gen X, Millennial or Gen Z cohorts of late (and even some Baby Boomers), it\u2019s almost inevitable that the conversation has swung around to the seemingly never ending cost-of-living stress.<\/p>\n
This topic, of course, is hardly anything new. By now, speaking about it feels like a broken record, not just for those who are comfortable enough to be sick of hearing about it but also for those who are lying awake in bed at night racked with panic. And yet the problem stubbornly refuses to go away.<\/p>\n
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If cost-of-living pressures mean you\u2019re constantly emptying your piggy bank, you\u2019re not alone.Dionne Gain<\/p>\n
It was about this time last year I wrote of the idea of a \u201cgood\u201d salary<\/a> and what that looked like for Australians in 2025. There were many factors people considered before landing on a number: if you have children or plan to; if you live regionally or remotely; if you\u2019re single or in a relationship; if you have pre-existing debts like higher education loans to pay off; and if you\u2019re getting help to buy a home or have to save up on your own.<\/p>\n When all was said and done, though, the broad consensus was that a salary of $120,000 would allow most people to pay their bills and have enough left over to be comfortable.<\/p>\n In the 12 months since that column was published, and with the threat of an interest rate rise<\/a> looming, people are still lying awake and thinking about the magic number that would make life that little bit easier.<\/p>\n And it\u2019s here that an interesting disconnect between theory and reality has emerged. In many wealthy countries around the world \u2013 including Australia \u2013 more and more people who would be considered middle-class on paper are finding themselves struggling, compared with previous generations.<\/p>\n When you consider some now spend 50 per cent of their salary on keeping a roof over their heads, it\u2019s no wonder they feel overwhelmed.<\/p>\n In November an essay<\/a> by US financial market strategist Michael Green went viral after he argued the income a family of four needed in America today was $US140,000 ($198,000) and that the measure of poverty had failed to keep up with modern living.<\/p>\n While many economists dismissed the argument and said most middle-class families today are richer than those from previous decades, Green\u2019s argument struck a nerve with so many people because he said out loud the quiet part that so many people were feeling.<\/p>\n The Australian Bureau of Statistics\u2019 latest employee earnings data<\/a> shows that the median salary for full-time employees in August was $1741 per week \u2013 up $41 from the same time last year.<\/p>\n Editor’s pick Annually, that works out to be $90,532 before tax. That salary is still well below the agreed-upon \u201cgood\u201d salary of $120,000 per year but it\u2019s still an amount many people would be chuffed to pocket each year.<\/p>\n But when you revisit the ABS data and look past that topline median figure and dig into the distribution of earnings, a different story emerges. As of August 2025, half of all working Australians earn an annual salary of $74,100 or less ($1425 a week).<\/p>\n Meanwhile, only one in four Australians (25 per cent) earned between $74,100 and $110,000, and just 10 per cent took home $156,000 ($3000 per week) or more a year.<\/p>\n By Green\u2019s metric, less than 35 per cent of working Australians are taking home the amount they need to live comfortably. And did I mention you need to be in a couple where both partners bring in an equal amount for that to work?<\/p>\n Now, let\u2019s say you\u2019re trying to follow the consensus among financial experts that no more than 20 or 30 per cent of your income should be spent on your rent or mortgage.<\/p>\n If you\u2019re living in Melbourne, where the median weekly rent<\/a> for an apartment and house is $580 per week, you would need to be earning a salary of more than $150,000 a year to comfortably afford it on your own, or at least $75,000 as part of a couple.<\/p>\n In Sydney, where the median weekly rent for an apartment is $750 and a house is $800, you\u2019d need a salary of more than $200,000 a year to afford it on your own, or just over $100,000 as part of a couple.<\/p>\n If you were to buy a house in Melbourne, where the median house price<\/a> rose to $1.1 million in December, the monthly repayments on a 30-year mortgage would set you back just over $5000 (assuming you had a 20 per cent deposit and an average interest rate of 5.42 per cent). In Sydney, where the median house price topped $1,759,909, that monthly figure climbs to $7934 per month.<\/p>\n Editor’s pick Again, for these loans to account for no more than 30 per cent of your income you\u2019d need to be taking home $317,360 a year as a single person, or at least $170,000 each as a couple in Sydney, and $200,000 as a single or $100,000 each as a couple in Melbourne.<\/p>\n But as the ABS data shows, the majority of people aren\u2019t. And ABS data also shows that while adults living with a partner is still the norm for most people, the number of Australians remaining single or living as single parents<\/a> is noticeably on the rise.<\/p>\n So, yes, critics of Green\u2019s essay are correct that the on-paper amount people are now earning has increased. But so, too, has every other expense within the \u201cnecessity\u201d bucket of a person\u2019s budget. In Australia, education costs continue to rise (even at \u201cfree\u201d<\/a> public schools), as do public transport <\/a>and petrol prices, groceries and utilities.<\/p>\n When you consider that some people are now spending as much as 50 per cent of their salary just on keeping a roof over their heads, it\u2019s little wonder they\u2019re feeling overwhelmed.<\/p>\n As tempting as it might be to tune out when someone wants to discuss their concerns or struggles because it feels as though you\u2019ve heard it all before, the best thing any of us can do is listen, not least because it\u2019s one of the few things in life that\u2019s still free.<\/p>\n Victoria Devine is an award-winning retired financial adviser, a bestselling author and host of Australia\u2019s No.1 finance podcast, She\u2019s on the Money<\/a>. She is also founder and director of Zella Money.<\/p>\n Advice given in this article is general in nature and is not intended to influence readers\u2019 decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.<\/p>\n Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n![\"Cutting](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/47d4a836c7f15e093707eaeca8c225dd079698ed.jpeg\")
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Mortgages are set to get more expensive.Dominic Lorrimer<\/p>\n![\"Topping](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/250378d0326e86a66bcf0d79adac03a7d8a1b933.jpeg\")
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