ONCE upon a time, a six-figure income was considered the mark of a well-to-do Australian.

Cracking the magical $100,000 mark was a rite of passage that enabled a young professional to say with satisfaction: “I’ve made it.”

Today, what was once a milestone of the aspirational class has become the bare minimum for those who want to achieve the essentials of the Australian dream: home ownership, a good school for the kids and the occasional overseas trip. Not to mention topping up your superannuation to ensure you’ll have at least $1 million to retire on.

As would-be homeowners scramble to save for a deposit while rising property prices outpace their efforts at frugality, Australians are acutely aware of how far their salaries can stretch.

Multi-millionaire property mogul Tim Gurner has set chins wagging this week with his comments that young people need to “get realistic” about their expectations and cut down on coffee, smashed avocado and overseas trips to achieve their financial dreams.

But with wage growth stagnant and the average national salary just $79,721, what chance does the everyday worker have at attaining the good life?

Comparison site Finder has crunched the numbers to reveal that six figures is the bare minimum needed to service a home loan in most capital cities — and that’s assuming living expenses are kept in check.

To pay off a $1.1 million home in Sydney, buyers would need to take home at least $110,728 after tax. That leaves them with $54,184 for all other living expenses.

In Melbourne, minimum net earnings of $98,220 are needed to service a $904,150 loan, with $52,104 left over for smashed avocado on toast.

Adelaide, Brisbane and Hobart are the only cities where a pre-tax income of $100,000 would be enough to cover living expenses and loan repayments, the analysis found.

A RATE HIKE AWAY FROM DISASTER

Even those Australians lucky enough to own property are feeling the pinch, with experts warning a modest rise in household costs could be enough to create financial turmoil.

“People earning $100,000 used to be considered well off in Australia, but try telling that to someone currently paying off a mortgage,” RateCity’s money editor Sally Tindall said.

“Many Australians are now burdened with housing debt and, if you live in Sydney or Melbourne, there is very little room to move.”

For a Sydneysider on this salary paying off a home bought for $860,000, she said, it would only take an interest rate hike of two per cent to bring on a financial crisis.

“It would add $10,320 onto your mortgage repayments, making your annual repayment alone $51,804,” she said.

“If you earn $100,000, that doesn’t leave much to live on once you take out tax and living expenses.”

Ms Tindall said this would leave just $400 a week to live on, concluding: “You’ll be living off the smell of an oily rag.”

Research by the JP Morgan Chase Institute in the United States found that a six-figure income would not protect against a double whammy of an unexpected expense and a sudden drop in earnings.

The firm found that its typical client would need to come up with $US13,800 if their cashflow was hit by such a combination of events.

Bessie Hassan, money expert at comparison site Finder, said the local picture was all too similar.

“Australians are one surprise expense away from financial stress, and more than half would not last more than three months if they lost their job,” Ms Hassan said.

She said mortgage holders were so focused on paying down their home loans that many were overlooking the need for an emergency savings fund.

‘TIME TO REIN IN SPENDING’

But not everyone agrees that $100,000 is paltry sum.

Personal budgeting expert David Rankin says Australians struggling to get by on that much need to take a hard look at their habits.

“Financial peace of mind is what people want, and it isn’t always related to what they earn. It’s as much about behaviour as it is about dollars,” Mr Rankin told news.com.au.

“The gap between what you earn and what you spend determines how well off you feel — but, because most people’s outgoings slavishly follow their incomes, the BMW-driving boss often feels no better off than the most junior member of their team.”

He said the problem was that people’s lifestyles revolved around instant gratification, which ironically was “anything but gratifying”.

Taking a disciplined approach and “taming your day-to-day living expenses” was the only way to escape the spending trap, he said.

It might sound painful, but there’s good news: “Most people have much more control over their spending habits than their pay packets.”

dana.mccauley@news.com.au