The latest RaboDirect Financial Health Barometer (FHB) reveals that women are worse off than their male counterparts when it comes to the size of their savings buffer. The survey revealed that females would only have a 92 day savings buffer if they were to lose their job tomorrow, compared to men who reported a 120 days savings buffer.
Overall the survey, which reflects the views and behaviours of 2,300 Australians aged 18-65, revealed that on average, Australians have a savings buffer that would only cover them for 3.6 months if they were to lose their job tomorrow, down from 4.7 months last year.
The findings come amid Australia’s rising levels of unemployment which are predicted to continue for the next two years.
According to RaboDirect’s Group Executive, Greg McAweeney, Australians can’t afford to be complacent about their savings: “Our research shows that on average, Aussies have a savings buffer that would last approximately three months. But against that, women are far worse off with just 13 weeks on average. That might not sound scary but the truth of the matter is it’s just not enough, especially when you consider all your expenses and the rising cost of living.
“We never think the worst will happen, but that doesn’t mean we shouldn’t be protecting ourselves against crippling unforeseen circumstances like losing your job. Having a healthy savings buffer isn’t just about having a little extra put aside for indulgences like holidays. It’s also about having protection to continue to fund your mortgage, childcare fees and the like until you get back on your feet. A good rule of thumb is to try and have a buffer of five to six months in a rainy day savings account.”
While it might seem difficult, Mr McAweeney says that increasing the savings buffer isn’t impossible. It requires simple planning and creating regular savings habits: “Pay yourself first when your salary hits your transaction account by direct debiting a regular amount to your savings account before you’re tempted to spend it. Do a stock take of what you’re spending your money on every month. This always surprises people and helps you to identify where you’re wasting money. If you’re funding your lifestyle through expensive credit card debit you’ll never be able to get a savings plan going. And make sure you’re using a savings account with a good ongoing rate and don’t leave your money lying idle in a transaction account that makes your bank rich, not you,” concluded Mr McAweeney.
Key findings:
Nearly 20% of Australians don’t have any existing savings so would have nothing to live off if they lost their jobs tomorrow.
Baby Boomers have the biggest savings buffer with, on average 5.2 months, compared to Gen X with 3.1 months and Gen Y with 2.7 months.
