Cost of living hits home for students

The rising cost of living is forcing students to choose between medical bills or feeding themselves, Victoria University Students Association president Ralph Zambrano says.

There had been a large increase in the number of students accessing free food from the association’s community pantry, and a rise in requests to access the student hardship fund, due to the rising cost of living, Zambrano said.

‘‘We are seeing students have to choose between medical bills, rent or groceries,’’ he said.

The Government’s cost of living payment had made little difference, and a lack of targetted support was leaving many students at their ‘‘wits’ end’’, he said.

‘‘Many students are using what little savings they have, and in some cases going into debt, just to pay for basic necessities. Because many are working multiple jobs on top of studies, we are seeing student after student completely burnt out,’’ he said.

Students were choosing to postpone their studies because they could not afford to continue, he said.

Students are not the only young people facing hardship because of the increased cost of living. A study from ASB, which analysed the saving and spending of more than 600,000 adults, revealed 53% of 18- to 24-year-olds had less than $1000 in savings.

ASB personal banking executive general manager, Adam Boyd said young people were spending more of their money on essential day-to-day living costs such as rent, food and transport compared to other age groups.

Rent and mortgage payments made up 20% of spending on average for the age group, Boyd said.

They were more likely to use buy now pay later services to finance day-to-day living, which could correlate with weaker savings habits, he said.

Only 31% of 18 to 24-year-olds were actively saving, with young men less likely to be saving than young women.

On average, men spent $187 more per month on transport, $55 more on eating out and $88 more on entertainment than women in this age group. But retail spending was higher for young women, who spent on average $71 more each month on shopping.

Infometrics principal economist Brad Olsen said the financial position of young people could create a drag on the country’s economic future.

The great number of young people currently in a challenging financial situation, could create a generation with financially less room to move in the future, Olsen said.