Spending 2025-26

Each year, I report on income and spending for the Australian financial year, which runs from 1 July to 30 June. This makes it easy to do a break down of gross income including taxes that's comparable to many you'll see online, though all our numbers are in Australian Dollars. Here is last year's report. I define a few things differently here than I usually do to make the numbers more comparable with other people's versions.*

At the top level we can break down total gross income (as reported in our tax returns plus employer superannuation contributions that are paid on top of nominal salary) into the following categories of spending (click on the image to read more easily):

The gross income for this year (bottom line) is just an estimate. It is based on the gross income we expect to report in our tax returns (before investment expenses etc.) plus employer superannuation contributions. Gross income is forecast to rise by 23% this year because of the redundancy package. It should fall again in 2026-27 despite a second redundancy payout.

Tax includes local property tax as well as income tax (projected) and tax on superannuation contributions. Tax is projected to rise by 26%! Investing costs include margin interest. These fell for the second year running. Mortgage interest is included in spending, while mortgage principal payments are considered as saving. Spending also includes the insurance premia paid through our superannuation. Current saving is then what is left over. This is much bigger than saving out of salaries because gross income includes investment returns reported in our tax returns. Spending fell for the second year running, by 0.7% and has been flat for the last four years. Mortgage principal saving rose again, because we are keeping more money in our offset account, reducing mortgage interest payments. Other saving rose 129% because of the redundancy. Graphically, it looks like this:

We break down spending into quite detailed categories. Some of these are then aggregated up into broader categories as shown here:

Our biggest spending category, if we don't count tax, is childcare and education, which increased by 12% this year. As mentioned above, the income and tax numbers are all estimates. Commentary on each category follows:

Employer superannuation contributions: These include employer contributions (we don't do any salary sacrifice contributions) but not concessional contributions we paid to the SMSF this year. They are down due to the redundancy and will fall dramatically in 2026-27.

Superannuation contributions tax: The 15% tax on concessional superannuation contributions including tax on our concessional contributions to the SMSF. It is up 24% this year, even though employer contributions fell, because the government increased the maximum concessional contribution to $32,500, and because I expect to pay a lot of Division 293 tax because of the redundancy payment pushing me further above $250k of income.

Franking credits: Income reported on our tax returns includes franking credits (tax paid by companies we invest in). We need to deduct this money which we don't receive as cash but is included in gross income. Foreign tax paid is the same story. If we get franking credits refunded that will reduce the income tax line.

Income tax: Hits a record this year again because of the redundancy.

Life and disability insurance: Only a 3% decrease despite the redundancy, because Moominmama's insurance skyrocketed. More people are claiming disability post-pandemic.

Health: Includes health insurance and direct spending. Up 13%. Spending peaked with the birth of our second child.

Housing: Includes mortgage interest, maintenance, and body corporate fees (condo association). It is down this year because we parked more cash in our offset account reducing the mortgage interest we need to pay.

Transport: About 60% is spending on our car and 40% is my spending on Uber, e-scooters, buses etc. It is down 8%. This will likely rise in 2026-27 when we include stamp duty and depreciation on the new car and a big write down in July on the old car, which we only got $500 for as a trade-in.

Utilities: This includes water, gas, electricity, telephone, internet, and online storage etc. Up 13%. Electricity rose 36%, water and sewage 16%, phone and internet 6%, and gas–the smallest expenditure in this group–fell 33%.

Subscriptions: Includes all payments for online electronic services that aren't basic infrastructure. Continues to flatline.

Supermarkets: Includes convenience stores, liquor stores etc as well as supermarkets. It has been constant for the last five years.

Restaurants: This was low in 2017-18 because we spent a lot of cash at restaurants and during the pandemic for obvious reasons. It has now levelled out. Actually, we spent quite a bit on restaurants while travelling in China and Vietnam that either came out of Chinese accounts that aren't included here or in cash.

Cash spending: This is up strongly this year due to spending in cash in China and Vietnam. Generally, Western credit cards can't be used in China.

Department stores: All other stores selling goods that aren't supermarkets. Fell 45%.

Mail order: This has come down over the last five years and halved this year compared to last. We now get mail order direct from China, which is paid for from China and doesn't enter these accounts.

Childcare and education: We are paying for private school for both children now, plus music classes, swimming classes... It was up 12%, after the school raised fees by 23% for 2026.

Travel: This includes flights, hotels etc. It was very high in 2017-18 when we went to Europe and Japan. In 2020-21 it was down to zero due to the pandemic and having a small child. It was up only 1% this year. We travelled to China and Vietnam.

Charity: Up 12%.

Professional: Up 292%. We got various things done while we could either still deduct them against salary income or get reimbursed by our employers. This included two computers and a lifetime membership of a professional association.

Other: This is mostly other services. It includes everything from haircuts to tourist attractions, movie theatres, and clothing and watch repairs. Up 26%.

This year's reduced spending was mainly driven by reduced mortgage interest and mail order costs, while the professional category and education were the main increasing categories. Professional will be much lower in 2026-27, while childcare and education and transport will probably be the biggest increasing factors. I predict a 3% increase to $179k.

* Income here is taxable income before deductions plus employer superannuation contributions, whereas I normally included unrealised gains in income and deduct margin interest etc. and I normally report salary post tax. Savings here are out of gross taxable income rather than just out of non-investment income normally. Mortgage interest is counted as spending here rather than an investment cost.