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Last year, my bank balance decreased significantly.
Have you ever wondered how much other people save for a rainy day?
For the average Australian, the answer is obviously $12,360, but for most of the country it's zero.
And that's largely thanks to rising interest rates and soaring rents that have burned a hole in most people's wallets.
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A study by comparison group Finder.com.au found one in three Australians surveyed had less than a dollar in emergency savings.
Rising rents limit the amount that many households can save.
This meant there was no buffer to cushion unexpected expenses or sudden reductions in current income, which could have dire consequences.
Rising interest rates and rents, along with record increases in other living costs, are seen as contributing factors to many people saving less.
Sarah Megginson, a personal finance expert at Finder, said millions of households were unprepared to deal with financial emergencies.
They live check-to-paycheck and may even need to borrow money in case of an emergency, she said.
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“Australians are feeling the pinch from rising interest rates, food prices and electricity bills, and are increasingly drawing down on their savings, potentially leaving them highly vulnerable to unexpected expenses,” Megginson said. said.
Finder.com.au personal finance expert Sarah Megginson said small changes in habits could make a difference.
“Everything from a job loss to a car accident or an unexpected dental visit can spell disaster for cash-strapped Australians. It reduces stress and reduces the need to rely on credit.”
Finder's research is based on a nationally representative survey of 1,062 respondents.
The average Australian is reported to have $12,360 on hand for emergencies, which is more than the estimated $9,708 people think they should have set aside for unplanned expenses. Masu.
Men have an average of $17,832 in emergency savings, three times more than women ($6,859).
Average savings also vary by generation. Gen Z individuals had an average of $6,141 in emergency savings, while baby boomers had $18,200 stashed away.
Megginson said rising costs of living are reducing savings buffers, but small changes can make a difference over time.
“Small habits can create big money leaks. It's pausing before buying a bottle of water or soft drink when you're out and about buying a pizza instead of paying for a separate meal when you go out for dinner. Share. Switch from expensive brands to common brands at the supermarket and reduce the amount of takeout and last-minute meals.
“If you save an extra $50 a month with these small actions, you'll have an emergency fund of $600 in a year. It may not sound like much, but it's a lot more than $0. is much better.
“If you’re just starting out, a good goal is to have an emergency fund that can cover at least one month’s worth of expenses.
“As for where to stash it, look for a savings account that gives you easy access to your money and the highest possible interest rate.”
