The average Australian says they are saving $928 every month, yet millions of people have only a marginal financial safety net, according to new research.
There is a growing divide between people who have managed to build a monetary buffer and those living pay cheque to pay cheque, analysis by comparison site Finder found.
While many Australians are saving thousands of dollars every year, millions of people have less than $1000 in savings. Dominic Lorrimer
The average savings balance has climbed to $47,487 in August, up from $31,841 during the same month in 2023.
But in stark contrast, 42 per cent of Australians – equivalent to 9.2 million people – admit they have less than $1000 in savings.
Finder Money expert Richard Whitten says the research shows despite the cost-of-living crisis, many people were managing to squirrel away substantial sums.
“Having money tucked away is the best way to stop a surprise car repair, medical bill or broken appliance from becoming a full-blown financial emergency,” he said.
“Even putting away a small amount each payday can start to create some breathing room.”
Whitten says the best way to save is to put money aside automatically instead of waiting for the end of the month and seeing what’s left.
Many Australians also have only scant knowledge of the interest rate from their savings accounts.
Separate Finder research shows just 15 per cent of people say they know exactly what interest rate they’re earning, while a further 34 per cent say they have a rough idea.
“Interest rates can vary dramatically between savings accounts, so not knowing what you’re earning could be costing you hundreds of dollars each year,” said Whitten.
“Check that your money is earning a competitive interest rate – ideally starting with a five – and make sure you’re not missing out on hundreds of dollars in interest.”