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Four weeks to live: almost half of Aussies have only one months’ savings buffer

Tags National Savings and Debt Barometer NSDB Financial Health Barometer
Category Financial Health Barometer

Red train buffers representing a savings buffer

A worrying number of Aussies are living dangerously close to the financial brink, with 46 per cent of working Australians admitting they would only have one months’ savings or less in the bank to tide them over if they lost their job, according to the latest RaboDirect National Savings and Debt Barometer (NSDB).

46 per cent equates to 5.3 million working Australians, more than the entire population of Singapore, almost the population of Finland, and about the same as the combined populations of Queensland, Tasmania and the Northern Territory.

This finding, part of a national survey of 2,355 Australians aged 18-65, doesn’t paint a pretty picture for the state of the nation’s financial well-being. But in the context of the most recent ABS data showing that national unemployment is only 5.1 per cent, Australian’s have the opportunity to turn this bleak outlook around and secure their financial well-being with a regular savings plan.

The survey also shows there is a strong direct correlation between regular saving and happiness and health. RaboDirect’s Executive General Manager, Greg McAweeney, says this is positive news for people who may be confused or concerned by news reports of doom and gloom in the global economic environment.

Key findings:

  • 46 per cent of working Australians have one month or less of savings to tide them over if they lost their job (20 per cent have no savings at all, 13 per cent have less than two weeks, 13 per cent have less than one month)
  • ‘Regular savers’ indicated higher levels of happiness and health, more comfort with finances and greater control over their financial destiny. Conversely, the most uncontrolled spending habits may weigh on financial and non-financial health, with less than 20 per cent of ‘unrestrained spenders’ saying they are completely happy in life and less than 10 per cent saying they are comfortable with their finances
  • 10 per cent of Australians say they feel like they are always in the red, up from 8 per cent last year
  • Stress is on an upwards trend, with more consumers saying this year that they need to budget and watch their spending (29 per cent, up from 25 per cent in 2011)

Greg McAweeney, Executive General Manager of RaboDirect Australia & New Zealand said:

“RaboDirect calls on Australians to urgently take stock of their personal financial well-being and to make wise choices about saving and savings products. This survey shows that those who have a regular and realistic savings plan, even just $5 a week, will improve their financial situation and at the same time benefit from a potential improvement in their mental and physical health and happiness. It’s a win win situation.

“Our message is simple. It’s never too late to start a regular savings plan and there’s no better habit to develop. Take the first step by moving excess money from your transaction account into a high interest savings account. Aussies are losing out on billions of lost interest by leaving their money in low interest accounts. There’s no need to feel powerless about the constant flow of doom and gloom economic commentary. Take control of your money by doing the simple things. And don’t be afraid of economists it’s their job to report bad news.

“Look for simple products that you understand and put a plan together that will help you to reach your financial goals sooner, such as true to label high interest savings accounts that don’t charge fees. And stop allowing the major banks to benefit from your hard earned cash by leaving it in low-interest bearing accounts.”