Broke before payday? You’re not alone
The number of Australians who end up practically skint just before payday has been revealed, and it’s more than you probably thought. Read our tips on becoming a successful saver.
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Many cash-strapped Australians are left with less than $50 in their bank account until payday, alarming new research has revealed.
Most people get a “sugar hit” when their wages arrive and go on a spending spree, before having to rein it in until they get paid.
In a new report dubbed Project Payphoria commissioned by business software firm Xero, it surveyed 1000 Australians and found one in six had less than $50 in their account before getting paid.
And one in three had less than $100 in their account before payday.
Xero small business advocate Angus Capel said the findings reinforced that Australians were “spending more than they earn”.
“They are also putting off their bills and that’s going to get stressful for people if they are cutting it so fine,” he said.
The report also found Australians had to cut back on discretionary items such as coffees, dining, taxis and night outs with family and friends until their pay cheque lobs.
It showed one in eight people even resorted to borrowing from family and friends to get by until their employer paid them.
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Financial adviser Scott Haywood said many people were too focused on “impulse buys” and needed to reduce their spending.
“Wages have not gone up, the rate cuts has not resulted in wage increases or job growth so people are treading water,” he said.
“And people are so impatient on wanting something so they just buy it and it means people haven’t budgeted and then left with $10 until the next pay cheque.”
Australians continue to be laden with hefty amounts of credit card debt. Latest Reserve Bank of Australia figures found consumers owed $50.2 billion on plastic and more than $30.6 billion was accruing interest.
Mr Capel said this could ultimately result in people turning to forms of credit such as plastic and buy now, pay later schemes to fill their budgetary gap.
“If the car breaks down or they have medical expenses they are going to have to turn to credit cards and things like Afterpay which can land them in a sticky spot,” he said.
The report also showed most people get paid fortnightly (52 per cent), followed by weekly (28 per cent) and monthly (15 per cent).
HOW TO MAKE YOUR PAY LAST
• Set a budget.
• Spend less than you earn.
• Use separate accounts to split your money.
• Ask a family member, friend or financial expert for help.
• Make a spending checklist and stick to it.
Originally published as Broke before payday? You’re not alone