A large number of Australians are living close to the financial crisis. It is gathered from government reports that 4 out of every 10 Australians have one month or less of savings with them to take care of any loss of income. Such a high number of people are as good as the entire population of a small country like Nepal. The situation is worrisome and there has to be some serious thinking on the cause and effect of this.
Such a situation is not projecting a well to do picture of the personal finances of Australians. The good thing is that the improvement in the employment scene and if the citizens adapt to a regular saving plan, then this bleak picture can soon be reversed for good.
Savings are not only useful for your financial security, but studies have shown that there is a direct link between savings and personal health and happiness. The idea is not to put you in a panic, but to let you see the positive aspect of this news that apparently looks like a bad one.
Let us understand the figures in better details
We have already told that almost half of the Australian households have less than $5000 or less in emergency funds, and they cannot withstand the loss of income for a period of more than one month.
This section of society is growing as almost 2% of the population added to this vulnerable group in the last six months. Now they have grown to almost 51% of the entire working population.
Almost 11% of the people are spending more than what they are earning. It means they have nil savings and even if they have surplus cash then soon they will join the weaker section.
Almost 5% of the people are using their home equity to tide over the gap in earning and spending. It means they have no cash and are also losing the assets to meet the outflow.
Almost 1/3 of the households in Australia do not have safe jobs. The scene is so sad that if they lose their current job, then the chances of getting a new job before two months are also bleak. Even among the people who have enough savings, a significant number have substantial debt to pay back.
All this is reflecting as fall in household savings, making the situation worse with each passing day.
The problem is ok but now for the solution part … and it is simple.
The Australians need to make an immediate assessment of their spending habits and make wise investment and saving choices. If you choose the saving plan properly then, just a saving of $20 per week will improve your financial standing phenomenally and will also aid in improving your mental and physical health and happiness levels. If you do this via a direct transfer as soon as your pay goes in, you don’t even notice it and being automatic, it will happen consistently. All in all, it is a win-win situation for everybody.
There is no perfect time to start saving. Start right from today. Start with moving the excess funds from expenditure account to higher interest savings account. We tend to lose lots of money by leaving the funds in a low-interest account, and this can easily be avoided.
If you take control of your expenditure and savings then you do not have to worry about the doomsday news that is falling on you from all sides.
Define your goals; choose simple saving products and start saving from today. No savings is small if it is regularly done, and do not forget to make use of the high-interest saving account for surplus funds and stop allowing banks to earn from your money.
I can help you take control and live happily. Find out how.