Finder’s Sarah Megginson urged people to assess their income, everyday bills and expenses and set realistic goals. (Source: Supplied/Getty)
For many Australians, earning a six-figure salary used to mean you had “made it” and were well-off in your career. But with the cost of living, including rents and mortgages, groceries and bills, skyrocketing, new research has laid bare just how much that amount has blown out.
The average Australian now needs to earn $389,118 a year to feel rich, research by Finder found. That’s up more than $50,000 from three years ago.
Finder personal finance expert Sarah Megginson told Yahoo Finance this figure was in stark contrast to the amount the average person was actually earning.
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“While social media can make us feel inadequate, the reality is that the average Australian earns just over $60,000 – a far cry from the $400,000 some might aspire to,” she said.
Men thought they needed to be earning even more to be considered rich at $393,438, while women thought they needed to be putting away $384,424.
There was also a generational divide, with Millennials needing the most money to feel rich by a long shot at $470,881. That’s compared to $273,648 for Baby Boomers, $351,793 for Gen Z, and $416,067 for Gen X.
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Megginson said the divide could be down to Millennials and Gen X being faced with the strain of homeownership, childcare, education costs and retirement planning.
Baby Boomers are more likely to be financially secure and have lower living costs, while Gen Z may still live at home or in share houses.
A Yahoo Finance poll of nearly 950 readers found 44 per cent thought $100,000 was not a “good” salary and people now needed much more. A fifth thought it was a good amount as it was more than the average, while 37 per cent thought it was good but wasn’t worth as much.
Australia’s Consumer Price Index rose 3.8 per cent in the 12 months to October, up from 3.6 per cent in September. The biggest price rises were seen in housing, food and non-alcoholic beverages, and recreation and culture.
Separate Finder research found the average Australian in December had an impressive $43,666 in cash savings. That was up from $40,195 in December last year.
Men reported having higher savings at $53,300, while women had nearly half of that at $27,529. Generationally, Baby Boomers naturally reported having the most at $50,352.
That trended down by age, with Gen X having $49,855, Millennials at $40,038, and Gen Z at $21,326.
While the figures may seem high, Finder’s data also found 43 per cent of Australians had less than $1,000 in savings during the month.
Megginson urged Aussies to focus on realistic financial goals and great money management skills.
“Look at how much you earn and what your everyday bills and expenses are so you know how much you can afford to spend on luxuries,” she told Yahoo Finance.
“Using free budgeting tools is a great way to track spending and set a realistic budget, which can help you build your savings.”
Finder’s data showed the average Aussie was saving $892 per month in December, or over $200 a week.
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