Shock bank balance of one third of Aussies revealed

Ever wondered how much everyone else has saved up for a rainy day? After 18 months of interest rate hikes and record rent rises, the answer may surprise you.

Bank balances have taken a beating over the last year.

Ever wondered how much everyone else has saved up for a rainy day?

The answer is apparently $12,360 if you’re the average Aussie, but for a large portion of the country it’s zero.

And that’s largely thanks to rising interest rates and skyrocketing rents punching a hole in most people’s wallets.

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A survey by comparison group Finder.com.au revealed one in three Australians polled didn’t have a dollar of emergency savings to their name.

Rising rents have limited the amount many households can save.

This meant they had no buffer to cushion them from unexpected expenses or any surprise reductions in their current income, with potentially disastrous results.

Rising interest rates and rents, along with record increases in other living costs, were deemed a factor in many people’s low savings.

Sarah Megginson, personal finance expert at Finder, said millions of households weren’t equipped to handle a money emergency.

They were living pay cheque to pay cheque and may even need to get into debt if an emergency came up, she said.

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“As Aussies feel the pinch of rising interest rates, grocery prices and electricity costs, they’re dipping into their savings more and more, which could leave them very vulnerable if an unexpected expense arises,” Ms Megginson said.

Finder.com.au personal finance expert Sarah Megginson said some small habit changes could make a difference.

“Anything from a job loss to a car accident or even an unexpected dental visit could spell disaster for cash-strapped Aussies. Having savings available for an emergency can alleviate so much stress and reduce the need to rely on credit.”

The Finder research was based on a nationally representative survey of 1,062 respondents.

The average Australian was reported to have $12,360 to fall back on in case of an emergency – more than the estimated $9,708 they believe they would need set aside for unplanned expenses.

Men had an average of $17,832 in emergency savings – three times more than women ($6,859).

Average savings also varied between generations. Individuals from Gen Z had an average $6,141 in emergency savings, compared to the $18,200 baby boomers had stashed away.

Ms Megginson said rising living costs were eating away at savings buffers but some small changes could make a difference over time.

“Little habits can create big money leaks. It’s things like pausing before you buy a bottle of water or soft drink when you’re out and about; sharing a pizza instead of paying for separate meals when going out for dinner; switching expensive brands for generic brands at the supermarket and cutting back on takeaways and last-minute meals.

“If these small actions result in an extra $50 a month stashed away in savings, after a year, you’ve got a $600 emergency fund. It might not sound like a lot, but that’s far better than $0.

“If you’re just getting started, a good aim is to save up an emergency fund to cover at least one month’s worth of expenses.

“As for where to stash it, look for a savings account where your money is easy to access and will earn the highest possible interest rate.”

Originally published as Shock bank balance of one third of Aussies revealed