More Australians are rethinking the need for an emergency fund, as the impacts of COVID-19 send many households’ personal finances reeling.
More than a third of Aussies are looking to tighten their belts to better prepare for potential financial pressures in the future, a new St. George Bank survey showed.
Families intend to do this by starting spending budgets, changing how they spend and save, planning how they can save for future financial needs, as well as considering alternative ways to reach their financial goals.
Nearly 40 per cent have already taken steps to increase their income, with 15 per cent beginning to sell second-hand items online and nearly one in 10 families taking up a second job.
Many regret not starting earlier, with 53 per cent of households wishing they had saved more before COVID-19 to help better prepare themselves for the crisis.
Half of Australians believe the financial impacts of COVID-19 will continue to affect their personal finances for the next two years.
And many weren’t in a comfortable financial position during the pandemic, with only half indicating they were financially equipped for the crisis.
St.George Bank general manager Ross Miller said attitudes towards emergency savings are changing after the coronavirus.
“In light of current economic circumstances, we are seeing households think differently about their financial circumstances, and post-COVID emerging, Australians are showing a keen interest in safeguarding their financial future,” he said.
“This shows some confident signals that households have learnt from current circumstances, are willing to cut back more, make a change or find extra ways of making income so they can be more financially prepared.”
The survey’s findings matched that of a recent NAB report, which showed that as a result of the pandemic and recession, Australians said they would save more money for emergencies.
Situation not improving for many
While COVID-19 is receding in Australia and many lockdown restrictions have eased, the pandemic is still taking its financial toll on a significant number of households.
Nearly one in five Australians said their household finances are in a worse position due to COVID-19 in the four weeks to mid-June, according to a new survey from Australian Bureau of Statistics.
About half of those on JobKeeper payments were receiving less income than what they would usually earn.
And one in seven indicated that their household took at least one financial action between mid-May and mid-June to support the cost of living.
Nearly one in 10 dipped into their accumulated savings or term deposits, while 2 per cent reduced their home loan payments.