A national survey by consumer researcher CHOICE has found 46 per cent of householders have reduced essential spending in the face of rising bills.
And even more - 62 per cent - have cut back over the past 12 months when it comes to non-essentials, with most saying clothes and entertainment (57 per cent in both cases) are the first thing to go.
Forty-eight per cent say their bills have increased "a lot", while only 8 per cent haven't noticed an increase.
Of the 1000 people surveyed in the Consumer Pulse Report, almost a third are finding it tough to get by on their income, while one in five are turning to credit cards or borrowing from family and friends.
And it's not uncommon to be dipping into savings just to make it to pay day, with 35 per cent admitting to it.
CHOICE CEO Alan Kirkland says it all reveals households are battling a cost of living squeeze.
"Which is perhaps not surprising at a time when inflation is outstripping sluggish wages growth, retail sales are fragile and the political debate remains focused on household expenses," Mr Kirkland said on Friday.
But CommSec economist Savanth Sebastian thinks the results may not be telling the whole story, citing increased retail spending as a sign of a recovery.
"I think we were doing it harder 12 months ago," he said.
"If you look at the retail sales statistics, there's been an incredible lift since the (2013 federal) election.
"And our research shows there's been an overall lift in discretionary (non-essential) spending."
Mr Sebastian does, however, agree there's been a rise in utility bill prices.
"It could be the case that we are spending a larger proportion of the household budget on utility bills," he said.
"But does it mean they're not spending elsewhere?"
Mr Kirkland said renters were finding it harder than homeowners.
"We found that 45 per cent of renters report difficulty getting by, compared to only 25 per cent of mortgage holders," Mr Kirkland said.
Mr Sebastian said: "Rents have been high, utility bills higher, so a significant proportion of your budget is spent on those items.
"The interest rates are at their lowest in 50 years.
"So you'll be feeling a lot more comfortable if you own your own home."
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