Money matters when you live in rural Australia

Jane Robertson, who lives 40 kilometres outside Wagga Wagga in rural NSW, says there’s surprisingly little difference from a financial perspective between living in rural Australia versus living in the city.

“I grew up in a country town, so it's just what I'm used to. But I've done stints in Sydney and Melbourne. In terms of cost of living, apart from purchasing your house, everything's the same.”

Although the family’s 600-acre property produces an income, Jane and her husband Andrew both have off-farm jobs. Robertson is the proprietor of handmade shoe business Millwood Shoes, while her husband is a pilot.

With three small children, day care is one of the family’s biggest expenses, as is healthcare. “Doctors who bulk bill are hard to find. Some will bulk bill children but not adults. If we see a doctor outside of hours, we’re looking at up to $165 for a 15 minute visit.”

Jane says Aldi's arrival in her town has made a difference when it comes to the cost of groceries. “A third of our wages goes on day care and groceries, which combined cost more than our mortgage.”

The Robertsons moved to their current property three years ago. Before that, they were able to take advantage of the rising property market by buying and improving a number of properties. “We've been together nine years and this is our fifth house. Our first home cost $240,000 and we’ve slowly moved up from there.”

The family has a self-managed super fund and is focused on building its balance. While she says there’s no difference in access to wealth-building investments whether you live in the country or city, it does take them an hour and a half to see their financial adviser, and that’s an opportunity cost city folk don’t face.

Getting real with rural finances

While the Robertsons have set up their personal finances for success, research shows that, while there are many advantages of living in rural Australia, such as lower house prices and less traffic, other considerations such as higher unemployment rates can make it tougher to build wealth in rural  areas.

According to BT’s latest Australian Financial Health Index, Australians living in regional locations reported lower financial health in the second quarter of this year, with this measure declining by five points to zero. Regional Australia does tend to report lower financial health levels than metro areas in the survey. The survey draws on the views of 4000 people in terms of how they manage their finances including savings and spending, retirement and super and insurance.

According to the survey’s results, people living in metropolitan areas reported a slight increase in their financial health in the second quarter, with this measure gaining two points to reach 12 points. This caused the gap between regional and metro Australia to widen to 12 points, the largest gap since tracking started in 2018.

Regional residents’ declining ability to meet cost of living expenses may have been a factor in this quarter’s survey results, with 44 per cent of regional Australians reporting difficulties in paying for necessary expenses such as housing, utilities, health care, food, clothing and transport over the last 12 months. This figure was 38 per cent in the first quarter.

Joel Bones, a financial adviser with IEC Financial Advisory, says in general, the cost of living in rural areas, especially regional centres, is about the same as city areas. Other expenses are more affordable.

“Property prices are often much lower and therefore mortgages and the cost of servicing them are lower and rents can be cheaper.”

Although unemployment levels may be higher for some jobs, Bones says depending on your line of work, skilled labour is in higher demand in rural areas.

“So you could command higher premiums in the labour market compared to city areas. Week-to-week, transport costs are likely to be cheaper, as long commutes involving tolls and high fuel bills are not a typical feature of life in a rural area. This can save hundreds of dollars a week in travel costs that can be allocated to something else in your budget.”

But other transport costs such as air travel to a larger centre are often more expensive. “Looking for specials and booking well in advance are some ways to manage this,” he says.

City areas also typically have superior infrastructure compared to rural areas such as roads, international airports and ports. “But with governments and private enterprise continuing to make large and widespread investment into infrastructure nationwide, this gap is closing, although this depends where you live.”

If you’re thinking of making a sea or tree change, it’s worth thinking through the many factors discussed above before making the switch.

“You need to consider and compare the relative job opportunities you will have and likely income you can generate versus the costs of housing and living. Also assess other factors unique to you and your stage of life such as options and costs for education and healthcare,” says Bones.

“Also figure out one-off expenses, such as the cost of selling your current home and buying a new one, moving expenses and any impact on your income while you make the shift,” he adds.

If everything adds up, making the move to a regional area could be a great way to shift gears. The idea is to do your sums and consider your circumstances and the opportunities in your area before making a move.