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February 1, 2026 — 5:01am
If you’ve spent any time around the Gen X, Millennial or Gen Z cohorts of late (and even some Baby Boomers), it’s almost inevitable that the conversation has swung around to the seemingly never ending cost-of-living stress.
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.
It was about this time last year I wrote of the idea of a “good” salary 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’re single or in a relationship; if you have pre-existing debts like higher education loans to pay off; and if you’re getting help to buy a home or have to save up on your own.
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.
In the 12 months since that column was published, and with the threat of an interest rate rise looming, people are still lying awake and thinking about the magic number that would make life that little bit easier.
And it’s here that an interesting disconnect between theory and reality has emerged. In many wealthy countries around the world – including Australia – more and more people who would be considered middle-class on paper are finding themselves struggling, compared with previous generations.
When you consider some now spend 50 per cent of their salary on keeping a roof over their heads, it’s no wonder they feel overwhelmed.
In November an essay 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.
While many economists dismissed the argument and said most middle-class families today are richer than those from previous decades, Green’s argument struck a nerve with so many people because he said out loud the quiet part that so many people were feeling.
The Australian Bureau of Statistics’ latest employee earnings data shows that the median salary for full-time employees in August was $1741 per week – up $41 from the same time last year.
Annually, that works out to be $90,532 before tax. That salary is still well below the agreed-upon “good” salary of $120,000 per year but it’s still an amount many people would be chuffed to pocket each year.
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).
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.
By Green’s 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?
Now, let’s say you’re 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.
If you’re living in Melbourne, where the median weekly rent 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.
In Sydney, where the median weekly rent for an apartment is $750 and a house is $800, you’d 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.
If you were to buy a house in Melbourne, where the median house price 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.
Again, for these loans to account for no more than 30 per cent of your income you’d 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.
But as the ABS data shows, the majority of people aren’t. 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 is noticeably on the rise.
So, yes, critics of Green’s essay are correct that the on-paper amount people are now earning has increased. But so, too, has every other expense within the “necessity” bucket of a person’s budget. In Australia, education costs continue to rise (even at “free” public schools), as do public transport and petrol prices, groceries and utilities.
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’s little wonder they’re feeling overwhelmed.
As tempting as it might be to tune out when someone wants to discuss their concerns or struggles because it feels as though you’ve heard it all before, the best thing any of us can do is listen, not least because it’s one of the few things in life that’s still free.
Victoria Devine is an award-winning retired financial adviser, a bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ 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.
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