Money

We’re using more energy to stay in to “save money”

Published

1 year ago

February 15, 2023

ticker NEWS

Soaring energy costs are a major factor in the global cost-of-living crisis. The conventional wisdom is people will reduce their energy use in response to rising prices.

However, our research published today suggests rising costs of living are more likely to increase household energy use as people economise by doing more at home.

Our research shows people relate to energy through what it helps them do: feed the family, clean the house and stay healthy, comfortable and entertained. Energy itself is rarely the first consideration. When we understand energy as embedded in everyday life, the simple laws of supply and demand become complicated.

For example, in the face of the cost-of-living crisis, households are investing in home luxuries, our research shows. Rather than spending money on outside activities, it’s going into upgrades and technologies that bring them fun, comfort and safety.

Many are adding air conditioning, air filtration, pools, spas, heated outdoor entertaining areas and bar fridges. They are adding or renovating sheds and outdoor areas to create extra living space. All these changes increase their energy use.

Drawing on a four-year study of households in Victoria and New South Wales, our research developed four scenarios of everyday life in 2030 and 2050. In two scenarios, the home takes on an even more essential role in everyday life. This has significant implications for both energy forecasts and social inequality.

Many people reason investing in a home cinema, kitchen appliance, spa or bar is more affordable than going out all the time. Setting up a home office may also be cheaper and more convenient than commuting.

For example, research participants Haruki and Sara (both pseudonyms) were converting a disused shed into a recreation space, complete with a television, video games, refrigerator, heating and cooling, and an electric drum kit. It would be a space where their three children spend their free time, but also serve as an office for Sara to teach music.

Covid lockdowns

COVID-19 lockdowns were a strong impetus for these trends. Many people’s homes became their main site of work and play. They were schools, workplaces and gyms all in one. They also become a haven from the airborne threats outside.

Some might expect these trends to reverse with COVID restrictions lifted and the cost of living soaring. However, our research shows these expectations of the home are continuing and accelerating.

As activities like going on holidays, or going out for dinner, become more expensive, investing in the home makes sense. Staying home, even if it involves higher energy costs or buying new appliances, may still mean big savings for the overall household budget.

Our in-depth research provides a nuanced view of how diverse consumers will engage with the energy system beyond merely responding to energy prices. This evidence can help the sector improve forecasting and energy future scenarios. We provide resources to help incorporate aspects of our scenarios into industry modelling.

Industry modelling

Our team at Monash University’s Emerging Technologies Research Lab developed the Scenarios for Future Living report. It presents four scenarios of everyday life – two each in 2030 and 2050.

The scenarios are based on qualitative research with households in Victoria and New South Wales for the Digital Energy Futures project, as well as national data from the Energy Consumer Behaviour Survey. We studied people’s everyday routines, priorities and future visions, including the use of emerging digital and energy technologies. The scenarios also draw on broader demographic, technological, economic and environmental trends and the latest climate science.

One 2030 scenario, called “Creature Comforts”, envisions a world where, in response to rising living costs, households invest in consumer electronics and home upgrades. Energy use remains high as households seek to create a comfortable and safe haven.

The 2050 scenario, “Hunkering Down”, takes this trend further. Homes are optimised to provide a safe, productive and comfortable refuge from extreme weather and climate change. Institutions regularly close due to more frequent extreme weather events. People who can afford housing and technology upgrades stay home, where additional spaces and advanced equipment enable most work, school, exercise and entertainment activities.

In the second 2030 scenario, “Sharing the Load”, households continue to invest, where possible, in solar panels, household batteries and electric vehicles. They prioritise being resourceful and generous with excess power by sharing it with others.

In the second 2050 scenario, “Sunrises and Siestas”, institutions and society adapt to climate change through policy and community initiatives and infrastructures. The home remains important to people’s safety and comfort – but there are more services and technologies that ease the financial pressures on households due to their energy use.

To bring these scenarios to life, we created narratives for three households: a wealthy and technology-savvy suburban household, a low-income renter, and a retired rural household. Following these households across each scenario reveals the varying impacts on households of different socio-economic and geographic backgrounds.

Wealthy households can afford to insulate themselves from external threats. They manage changing conditions by upgrading their homes. In contrast, people without the means to invest in such upgrades are left exposed to rising costs and extreme weather conditions.

Our research has critical implications for energy policymakers and industry. It underscores the need for a sophisticated, comprehensive approach to considering people’s lives, social change and household investment. Energy planning must account for how various futures can amplify or reduce inequities.

Money

Research shows daters are looking for solvent partners

Published

2 days ago

April 18, 2024

Ahron Young

As the cost-of-living crisis continues to grip Australia, new research reveals a shifting landscape in the realm of dating preferences.

According to the survey conducted by eharmony, an overwhelming two-thirds of Australians are now keen to understand their potential partner’s financial situation before committing to a serious relationship.

The findings indicate a growing trend where individuals are becoming more discerning about whom they invest their affections in, particularly as the economic pressures intensify.

Good debt

While certain forms of debt, such as mortgages and student loans (e.g., HECS), are deemed acceptable or even ‘good’ debt by a majority of respondents, credit card debt, payday loans (such as Afterpay), and personal loans top the list of ‘bad’ debt, with 82%, 78%, and 73% of respondents, respectively, expressing concerns.

Interestingly, even car loans are viewed unfavorably by a significant portion of those surveyed, with 57.5% considering them to be undesirable debt.

Sharon Draper, a relationship expert at eharmony, said the significance of financial compatibility in relationships, noting that discussions around money are increasingly taking place at earlier stages of dating.

“In the past, couples tended to avoid discussing money during the early stages of dating because it was regarded as rude and potentially off-putting,” Draper explains.

“However, understanding each other’s perspectives and habits around finances early on can be instrumental in assessing long-term compatibility.”

Money

US energy stocks surge amid economic growth and inflation fears

Published

5 days ago

April 15, 2024

ticker NEWS

Investors are turning to U.S. energy shares in droves, capitalizing on surging oil prices and a resilient economy while seeking protection against looming inflationary pressures.

The S&P 500 energy sector has witnessed a remarkable ascent in 2024, boasting gains of approximately 17%, effectively doubling the broader index’s year-to-date performance.

This surge has intensified in recent weeks, propelling the energy sector to the forefront of the S&P 500’s top-performing sectors.

A significant catalyst driving this rally is the relentless rise in oil prices. U.S. crude has surged by 20% year-to-date, propelled by robust economic indicators in the United States and escalating tensions in the Middle East.

Investors are also turning to energy shares as a hedge against inflation, which has proven more persistent than anticipated, threatening to derail the broader market rally.

Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group, notes that having exposure to commodities can serve as a hedge against inflationary pressures, prompting many portfolios to overweight energy stocks.

Shell Service Station

Energy companies

This sentiment is underscored by the disciplined capital spending observed among energy companies, particularly oil majors such as Exxon Mobil and Chevron.

Among the standout performers within the energy sector this year are Marathon Petroleum, which has surged by 40%, and Valero Energy, up by an impressive 33%.

As the first-quarter earnings season kicks into high gear, with reports from major companies such as Netflix, Bank of America, and Procter & Gamble, investors will closely scrutinize economic indicators such as monthly U.S. retail sales to gauge consumer behavior amidst lingering inflation concerns.

The rally in energy stocks signals a broadening of the U.S. equities rally beyond growth and technology companies that dominated last year.

However, escalating inflation expectations and concerns about a hawkish Federal Reserve could dampen investors’ appetite for non-commodities-related sectors.

Peter Tuz, president of Chase Investment Counsel Corp., highlights investors’ focus on the robust economy amidst supply bottlenecks in commodities, especially oil.

This sentiment is echoed by strategists at Morgan Stanley and RBC Capital Markets, who maintain bullish calls on energy shares, citing heightened geopolitical risks and strong economic fundamentals.

Money

How Australians lose nearly $1 billion to card scammers in a year

Published

5 days ago

April 15, 2024

Ahron Young

A recent study by Finder has unveiled a distressing trend: Australians are hemorrhaging money to card scams at an alarming rate.

The survey, conducted among 1,039 participants, painted a grim picture, with 2.2 million individuals – roughly 11% of the population – falling prey to credit or debit card skimming in 2023 alone.

The financial toll of these scams is staggering. On average, victims lost $418 each, amounting to a colossal $930 million collectively across the country.

Rebecca Pike, a financial expert at Finder, underscored the correlation between the surge in digital transactions and the proliferation of sophisticated scams.

“Scammers are adapting, leveraging sophisticated tactics that often mimic trusted brands or exploit personal connections. With digital transactions on the rise, it’s imperative for consumers to remain vigilant and proactive in safeguarding their financial assets,” Pike said.

Concerning trend

Disturbingly, Finder’s research also revealed a concerning trend in underreporting.

Only 9% of scam victims reported the incident, while 1% remained oblivious to the fraudulent activity initially. Additionally, 1% of respondents discovered they were victims of bank card fraud only after the fact, highlighting the insidious nature of these schemes.

Pike urged consumers to exercise heightened scrutiny over their financial statements, recommending frequent monitoring for any unauthorised transactions.

She explained the importance of leveraging notification services offered by financial institutions to promptly identify and report suspicious activity.

“Early detection is key. If you notice any unfamiliar transactions, don’t hesitate to contact your bank immediately. Swift action can mitigate further unauthorised use of your card,” Pike advised, underscoring the critical role of proactive measures in combating card scams.

As Australians grapple with the escalating threat of card fraud, Pike’s counsel serves as a timely reminder of the necessity for heightened vigilance in an increasingly digitised financial landscape.