Rising Costs Challenge Australian Savings: New Survey Insights
Rising Costs Challenge Australian Savings: New Survey Insights
2
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The ongoing cost of living crisis is increasingly squeezing the wallets of Australians, with a fresh survey from Compare the Market offering new insights into just how precarious personal finances are for many.
A recent survey of 1,005 Australians highlights that nearly a quarter of participants (24.68 percent) could only support themselves for a month or less on their savings if they encountered a job loss or an inability to work. This statistic drops to 12.04 percent for those stating they could last up to two months, while a more fortunate 16.52 percent affirmed they could sustain their lifestyle for a year or more on their savings.
Chris Ford, a spokesperson for Compare the Market, remarked on the situation, stating, "The results of this study underline the tough economic environment many individuals and families are grappling with daily, as they navigate multiple interest rate hikes and inflation surges."
One particularly striking comparison is that Australians had higher debt levels than their American and Canadian peers. This trend is most pronounced among recent homebuyers, especially those under 41 years of age. The average Australian monthly savings figure stands at AUD 964, despite these financial hurdles.
Ford emphasized the importance of strategic financial planning, noting, "Savings remain crucial. That's why making informed choices on essentials-like insurance, home loans, electricity, and fuel-can aid in building a robust savings buffer."
The survey also included responses from 1,003 individuals in the United States and 1,002 in Canada. Approximately 24.23 percent of U.S. respondents could live on their savings for one month or less, while Canada reported a similar figure at 24.25 percent. Notably, both countries fared marginally better than Australia in terms of savings longevity, with 15.85 percent of Americans and 12.97 percent of Canadians able to last 12 months or more on their savings.
Debt comparisons showed that Australians hold the highest amounts, encompassing student loans, home loans, personal loans, and buy-now-pay-later (BNPL) debt. Australians owe, on average, AUD 145,140 (USD 93,935), compared to an average personal debt of USD 50,157 for Americans and CAD 50,967 (USD 37,032) for Canadians.
Additional findings reveal demographic nuances across countries. Americans and Canadians aged 26-41 are more prone to tapping into their savings monthly for expenses (37.62 percent and 33.35 percent, respectively). Conversely, the Australian Generation Z cohort, aged 18-25, reported being more frequent savers (27.61 percent using savings for expenses monthly).
Interestingly, Australian parents appeared most likely to dip into their children's savings to buffer personal financial shortfalls (15.48 percent), surpassing their Canadian (12.54 percent) and American (11.82 percent) counterparts.
Amid these revealing findings, the broader narrative underscores the necessity for prudent and informed financial management in navigating today's challenging economic landscape.
Published:Tuesday, 25th Jun 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
As 2026 approaches, Australia's major banks have released forecasts indicating potential interest rate hikes, sparking concerns about a renewed cost of living crisis. The 'big four' banks-Commonwealth Bank, National Australia Bank (NAB), Westpac, and ANZ-have dismissed the likelihood of rate cuts in the coming year, with some predicting increases as early as February. - read more
In the 2025 Consumer Finance Awards, Macquarie Bank has been honoured as the Money Minder of the Year by Money magazine. This accolade highlights the bank's exceptional performance in managing Australians' savings and term deposits. - read more
In the latest Consumer Finance Awards, Commonwealth Bank has been named Business Bank of the Year 2025 by Money magazine. This recognition reflects the bank's unwavering support for Australia's small and medium enterprises (SMEs). - read more
Personal loans in Australia are a popular financial tool for managing various expenses, from consolidating debt to funding major purchases or covering emergency costs. - read more
When you embark on the journey of securing a loan, one pivotal factor that looms large in the eyes of lenders is your debt-to-income ratio, commonly known as DTI. This crucial metric measures the chunk of your monthly income that goes towards paying debts, and it serves as a barometer for financial stability. A lower DTI can swing the doors wide open to favorable loan terms, while a higher one might signal red flags for potential lenders. - read more
Getting ready for loan approval can seem overwhelming, but having a clear understanding and the right documents can make a significant difference. - read more
