RateCity looks into how Australians feel about their savings and why Victorians are shining over the rest of the nation.
August 11, 2010
Let’s face it, saving can be hard; it can sometimes feel like a vicious cycle of money going out as fast as it comes in. But the good news is that while the feeling is mutual between you and your neighbour, you can do something about it.
According to a recent report from ING Direct called the Financial Wellbeing Index, Australian households feel uncomfortable when it comes to their savings. The report, which surveyed 1008 households, showed that for the first half of 2010 Australian households scored an average comfort level of 3.6 out of seven (seven being very comfortable). Overall, this was the lowest score across the six financial wellbeing focus areas such as short and long-term debt and household income.
It seems that our savings are suffering as a result of many households opting to pay down their debts, such as mortgages and credit cards. Any spare cash that we do have, is decreasing fast with the median savings per household, including balances in transaction and savings accounts, as well as term deposits, is $6848 – a drop of $829 from $7677 in the first quarter of 2010, according to the ING Direct report.
Victorians are the better savers
The report showed that almost 31 percent of households are "very uncomfortable" about their savings, while only 14 percent of households are "very comfortable" with their personal savings.
Overall, 17 percent of Australian households have absolutely no savings at all. While these are likely to be low-income earners, 11 percent of households earning a higher annual income of $100,000 are also feeling the pinch with no reported savings.
When it comes down to which state’s residents are the better savers overall, Victorian households win hands down with a median balance of $10,910, while households in Queensland show the least amount of savings with a median of just $3630, according to the report.
Get your savings to a level you feel comfortable with
Easier said than done right? Wrong. Like most things if you put your mind to it, it can happen. In order to save, it just takes a bit of planning, changes to your spending habits, some dedication and you should see changes almost immediately.
Here are some simple ways that may help you to increase your savings to a level you are more comfortable with.
- Open an online savings account. Compare online and setup an online savings account that will earn you a higher interest rate than a standard everyday savings account.
- Setup a savings budget. Work out a budget which shows what money you have coming in and what you have going out. From there you can work out a way to cut back and be able to put more aside into your savings.
- Cut back. Look at ways you can cut back on your spending and put that money into your savings.