The cost of living in Australia has become a pressing issue for many, particularly for a Gen Z navigating the complexities of today’s economy. With rising housing prices, inflation, and shifting job markets, financial stability feels increasingly out of reach for many Australians. As Gen Z enters the workforce, they face unique challenges in achieving the standard of living that previous generations may have taken for granted.
This article explores how the current economic landscape is shaping the aspirations and financial expectations of young Australians, and what steps they can take to bridge the gap between their financial goals and reality.
The Rising Cost of Living in Australia
The cost of living in Australia has been a dominant discussion point in recent years. Housing affordability, everyday expenses, and inflationary pressures have made financial security a more pressing concern than ever. Gen Z, who is entering the workforce or moving into their peak earning years, are acutely aware of these challenges.
Unlike previous generations who might have been able to buy a home or save significantly with a moderate income, today’s economic conditions demand higher earnings to achieve the same standard of living. Rent, groceries, utilities, and transportation costs have all increased, prompting Gen Z to rethink what they need to earn to feel financially stable.
Desired Incomes for a Comfortable Life
A new survey by consumer portal Finder identified the annual salary range Gen Zers want to have to live comfortably. The data revealed they were hoping to land salaries of close to $200k. Millennials believe an annual income of $176k is sufficient for their lifestyle and Gen Xers state that they are comfortable with $161k.
Baby boomers, meanwhile, state that they can get by with $107k a year, based on the general assumption that most of them have retired and settled their mortgage (or are closer to making their last payments). It is also possible they have a considerable amount of super set aside.
The above numbers may seem staggering to some people, considering that the survey pegged the average annual income at $165k, while the ABS determined the national median income at $88,000.
Why Gen Z Has Higher Income Expectations
With the above amount in mind, some factors may contribute to Gen Z’s heightened income expectations.
Rising Housing Costs
Homeownership feels increasingly out of reach for young Australians, with property prices and rental rates soaring. Many Gen Zers believe that a higher income is necessary just to afford stable housing, considering at their age, they have yet to buy property or start raising a family, said Finder personal finance expert Sarah Megginson. That desire to have a larger income to afford property at a young age can be a challenge when you consider property prices in many Australian metro areas.
PropTrack’s January 2025 Home Price Index, for example, noted that to buy a house in a state capital, you must have an average annual pay of no less than $170k and to buy a flat, your pay will have to be over $120k. Those numbers will also differ based on the loan rate, the suburb you’re looking to settle in and how much money is required for a 20 per cent deposit.
Inflation and Living Expenses
From food to energy bills, the cost of daily necessities has surged, making financial security more challenging.
Job Market Shifts
Unlike their predecessors, Gen Zers are growing up in an era where gig work, freelancing, and multiple income streams are becoming the norm. They see greater earnings potential but also understand the volatility of modern employment.
Lifestyle Expectations
With social media exposure to diverse lifestyles and career success stories, Gen Z is more likely to envision a future where they earn well enough to travel, invest, and enjoy financial freedom earlier in life.
Financial Education
Access to online resources has made this generation more financially aware. They are more likely to discuss salary benchmarks, negotiate wages, and demand fair compensation than previous generations.
Bridging the Expectation vs. Reality Gap
While Gen Z’s financial aspirations are well-founded, the reality is that not everyone will achieve these income levels quickly. Here are some key considerations for young Australians looking to align their expectations with practical financial planning:
Career Planning
High-paying jobs typically require years of experience, education, and strategic career moves. Gen Zers must balance ambition with patience and skill development.
However, some observers may underline the need for caution on changing jobs frequently in search of the big paycheque – Gartner Inc’s latest Global Talent Monitor study revealed that 41.5 per cent of Australian Gen Zers constantly seek new work opportunities. Attitudes may also factor in the desire to earn larger incomes – Jane Lu, CEO of fashion brand ShowPo, said GenZer staff can be hardworking as older staff, but they want frequent constructive feedback and fast-tracked promotions.
Budgeting & Saving
Managing money wisely, reducing debt, and prioritising savings can help close the gap between income and expenses. Kylie Young, EveryDay Banking Experience executive at NAB, said Gen Zers were becoming more confident than older generations on discussing money management and doing simple strategies to save such as “No-Spend Weeks” where you don’t spend on non-essential items like clothes and dining out.
Investing Early
Those who start investing sooner can build wealth over time, potentially supplementing their income goals.
Alternative Income Streams
Side hustles, freelancing, and passive income sources can boost earnings beyond a single salary. The challenge, however, may lie in arranging things with the current employer to prevent conflict of interest or competitor issues.
Conclusion
Gen Zers in Australia have big financial aspirations, and for good reason. With the cost of living higher than ever, their income expectations reflect a practical understanding of modern economic realities. While achieving these goals will require effort, strategic financial planning, and adaptability, their ambition is a clear sign that they are prepared to navigate the financial landscape with a fresh perspective.
For this generation, money isn’t just about survival — it’s about securing a future that aligns with their aspirations. And with the right approach, many will find that their financial goals are not as far out of reach as they may seem.
DISCLAIMER: This article is for informational purposes only and is not meant to replace or supersede official finance advice. The data presented is based on the information present at the time of writing and may change without notice. QUICKLE is not affiliated with any consumer research portal. Please consult a financial advisor.
