Your Money

What do fear and savings have in common?

| More

Fear and worries over the state of the economy is driving more households to save more, says ING Direct. The bank's quarterly Household Financial Wellbeing Index found Australians are saving an average $313 each per month, with more than half of respondents harbouring worries over the economy and how it could impact upon their lifestyle.

In fact, according to the research, one in four Australian households have increased their savings over the last 12 months. Of the 41 per cent of households saving less, the rising cost of living was given as the prime reason.

ING Direct says there are two factors affecting this increase in savings – 53 per cent said they were saving more because of fears the economy will worsen, and 32 per cent said they were saving more because their earnings had increased.

According to the Index, Australians' ability to save varies from state to state. Victorian households lead the charge, saving an average $93 a week, followed by Western Australia with $86 a week. South Australia recorded the worst savers, averaging $56 per week.

“The savings message appears to be getting through with the proportion of Australian households who are ‘very comfortable’ with their level of savings jumping from 10 per cent in Q1 to 15 per cent in Q2 – the highest level since tracking commenced in early 2010,” says ING Direct CEO Don Koch.

However, households with an annual income less than $70,000 are finding it increasingly hard to stash any cash away. As would be expected, low-income families tended to have the worst savings habits, with the proportion of low-income households with no savings jumping from 29 per cent to 39 per cent this quarter.

“Many households continue to face a tough time meeting basic bills,” says Koch. “The single biggest hurdle to saving, cited by 34 per cent of households, is the cost of basic expenses like utilities and power. Among those households that are dipping into, rather than building, personal savings, 59 per cent blame rising living costs.”

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, July 20, 2011

Related articles

8 steps to family financial planning

How do I get rich?- the vital question not asked

How do I get rich?...the vital question not asked

How do you win?

The vital question not asked: how do I get rich?

blog comments powered by Disqus
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300