Australian consumers have been carefully weighing their spending and priorities have been set to stop themselves from buying things that are unnecessary.

This trend, according to the latest consumer spending in Australia, has been revealed in a new survey presented by the Melbourne Institute on Tuesday.

Australian consumers have tempered their spending and are now more inclined to save as household financial conditions have gone through some dire straits in the four months to April.

The increase in the value of the Aussie or the Australian dollar and the seemingly dire economic situation have prompted consumers to increase their precautionary savings, according to the latest survey by the Melbourne Institute measuring Australian household savings.

The Melbourne Institute household financial conditions index fell to 25.2 points, its lowest level since the start of the survey in March 2001. The March 2011 survey recorded an index of 33.3 points.

Research Fellow at the Melbourne Institute, Edda Claus explained that this has been a surprising result because house prices have been softening and unemployment has fallen below 5 percent.

"This could indicate that consumers see weakness ahead in economic activity and hence increase their precautionary savings," Dr Claus said. The said index would show the proportion shows the proportion of households who are saving as against those who are getting from their savings and those spending and acquiring credit.

Australian consumers save because they want to go for a holiday or travel, the survey said. This response took 58.7 percent or was the primary reason of the respondents.

The second most popular reason was "for a rainy day or a precaution," with 55.4 percent , down 0.2 per cent from March.

Repaying debt and paying bills was the third most popular reason for saving, with a response of 46.0 percent, an increase from 41.6 percent in the March survey.