SYDNEY, Sept 14 (Reuters) - A measure of Australian consumer sentiment edged higher in September as an improvement in personal finances made people more likely to splash out on big ticket items, a survey showed on Wednesday.

The Melbourne Institute and Westpac Bank survey of 1,200 people found consumer sentiment rose by 0.3 percent in September from August, when it increased 2 percent.

That left the index up a healthy 8 percent on September last year at 101.4, with optimists outnumbering pessimists.

Sentiment may have been supported by news last week that Australia’s economy grew 3.3 percent in the year to June, marking 25 years without a recession.

The Reserve Bank of Australia (RBA) also decided last week to hold rates at a record low of 1.5 percent following cuts in both August and May.

The impact of falling mortgage rates may have shown in the survey measure of family finances compared to a year ago, which rose 3.5 percent in September. The measure of whether this was a good time to buy major household items also rose a solid 3.5 percent.

Other readings were more mixed. The index for finances over the next 12 months dipped 2.3 percent, after jumping 4.3 percent in August.

The survey showed expectations for the economic outlook over the next 12 months fell 4.6 percent, while the outlook for the next five years improved by 1.1 percent. (Reporting by Wayne Cole; Editing by Shri Navaratnam)