The 2024/25 Financial Year brings minor regulatory changes that may present opportunities to update your superannuation and investment plans.

Increase to superannuation contribution caps.

Superannuation contributions are limited each year based on annual caps. These caps have now increased for the 2024/25 Financial year.

Concessional contribution caps have increased from $27,500 to $30,000 per annum. This cap covers superannuation guarantee payments from employers, salary sacrificed contributions, and personal contributions that you intend to claim as a tax deduction.

Non-concessional contribution caps have also increased from $110,00 to $120,000 per year. Non-concessional (after tax) super contributions are payments into superannuation from savings or taxed income for which no tax deduction was claimed.

Increase to Superannuation guarantee rates.

From 1 July 2024, Superannuation guarantee rates, the mandatory superannuation contributions employers make on behalf of salaried employees, have increased from 11% to 11.5%.

Changes to personal income tax rates and thresholds.

As of 1 July 2024, the personal tax rates for Australian tax residents have changed. The table below shows these changes¹.

* These figures do not include the Medicare levy, which has remained unchanged at 2%.

What opportunities could these changes offer?

With the changes to personal tax rates and thresholds, you may be receiving more take-home pay than previously.

Superannuation cap increases may enable you to salary sacrifice a little bit more while staying within the caps.

You may also consider increasing your non-concessional contributions.

It also means that your employer will be required to increase their regular contributions to your superannuation by 0.5%.

With these changes in mind, you should keep a close eye on your first few payslips to check out how much extra you might be able to contribute to your superannuation while maintaining the same take-home income.

However, before leaping on additional contributions, you need to consider previous years’ contributions, especially if you previously brought forward future years’ caps. There are certain requirements to meet to be able to make superannuation contributions. Exceeding the caps or making contributions when you are not eligible to do so may result in penalties.

Whilst there may not have been any major changes to the superannuation landscape, all these smaller changes combined may create a perfect opportunity for you to review your current superannuation and investment strategies.

If you need help determining what strategy may work best for you, it’s the perfect time to engage or reengage with your financial planner to take full advantage of these changes.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
1 https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/individual-income-tax-rates-and-threshold-changes

Do you have big goals for your future, like buying property or retiring early? A good place to start is being mindful about your spending to get ahead with saving and investing.

Beyond that, here are a few financial mistakes you could be making that could cost you:

1. You have too much cash in a savings account

Some people end up with too much cash sitting in a savings account because they’re unsure what else to do with that money and may be scared to lose it.

Whilst many advise having cash on hand as an emergency fund, the rule of thumb is that you should only aim for between three and six months of fixed and variable expenses readily available.

2. Your risk balance is wrong

If you select your investments randomly, you may find that your overall investment choices are too high or too low for your risk investment tolerance.

It’s important to understand your risk investment tolerance and when you’d want to access your investments – is it for a short- medium- or long-term goal? Once you know the answers to those things you can determine an investment strategy that is right for you.

3. Your time frame for investing is wrong

Do you know when you may want to access the funds from your investments? Are you saving or investing to meet a short- medium- or long-term goal?

Once you know your risk tolerance and your investment time frame, you can determine an investment strategy that is right for you.

4. You have too many random individual stocks, or have you allocated all your investments to the same asset class

Having a portfolio that is too heavily invested in one industry (for example, tech stocks) or one asset class (for example, Australian Shares) can be risky and not strategic. One option is to go broader by diversifying your investment portfolio and not having all your eggs in the one basket.

5. You aren’t protecting your loved ones financially

One thing you can do for your superannuation investments is make each other beneficiaries on your accounts. If your superannuation account has a nominated beneficiary, you may bypass the long process of having your assets in probate. Similarly, if your non-superannuation investments are held in joint names rather than individually, in the event of one partner’s death, the surviving partner will automatically become the sole owner, saving time and money.

If you and your partner both have a life insurance policy and have nominated each other as the beneficiary of that policy, this can ensure the other person can use your life insurance proceeds to pay for some debts and maintain the quality of life they are accustomed to if their partner passes away.

If you need help overcoming any financial mistakes you may be making, now may be the perfect time to engage or reengage with a financial planner.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

The latest ‘Cost of Care’ report has revealed the financial burden of illness, costing some Australians millions of dollars.

Zurich Financial Services has released its updated analysis on the growing incidences and cost of illness to help better understand the potential financial implications for Australians. It compares publicly available data on the prevalence, incidence, and survival rates, calculating the average lifetime and out-of-pocket cost for more than 30 medical conditions, including mental health, cancer, respiratory and heart disease.

The report highlights the significant financial burden of treating certain medical conditions in Australia. Unfortunately, many of these are growing in prevalence in an environment of increased cost-of-living pressures.

Mental health conditions – including affective disorders, anxiety and substance abuse – were the most prevalent in Australia in recent years, with over 12 million active cases between 2020 and 2022. This is followed by COVID-19, which has seen approximately 11 million reported cases over a similar period¹.

It revealed that spinal cord injuries had the highest lifetime cost in 2023, averaging between $6.8 million and $12.9 million. This is followed by childhood cancer, costing around $1.09 million, and Motor Neurone Disease at an estimated $201,340. Other common illnesses that also come with a significant financial burden include type one diabetes, costing an average of $143,000 over a lifetime, and chronic kidney disease, with kidney failure, costing around an average of $41,748 per year.

Highlighting the rising prevalence of cancer in Australia, the report found that eight of the top ten most occurring cancers had increased the number of yearly cases since 2018. In 2023, prostate cancer was the most common and saw the steepest increase, with 25,487 cases, up 43.8% since 2018. This was followed by breast cancer with 20,668 cases, up 14.4%, and melanoma with 18,239 cases, up 27.4%.

Of the top ten most expensive cancers, all had an average lifetime cost of over $20,000, highlighting the financial pressure of these illnesses. Head and neck, and thyroid cancer have the highest average lifetime costs in 2023, at $109,300 each. These were closely followed by non-Hodgkin lymphoma at $100,190 and lung cancer at $85,420².

This report highlights the increased need to ensure that you are adequately insured to cover not only the cost of treatment but also the potential loss of income during the treatment and recovery of yourself or a loved one. Please contact us to discuss how we can help you protect against the financial impact should you or a loved one experience significant illness or disease.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
1 https://www.zurich.com.au/latest-news/media-releases/2024/zurich-releases-cost-of-care-report-on-health-conditions-in-australia.html
2 https://www.ifa.com.au/risk/34368-understanding-the-financial-impact-of-illness

1. Check… that your Super is consolidated

Multiple accounts mean multiple fees, eating into your retirement savings. Use the ATO’s online services to track down lost super and consolidate your accounts easily.

Important Note – Make sure to check your insurance status before attempting any consolidation!

2. Check… how you are invested

Your super’s investment strategy should match your risk tolerance and retirement goals. Are you too conservative? Or too aggressive when it comes to investing?

Adjusting your investment mix can significantly impact your super’s growth over time.

3. Check… what insurance you have

Most super funds offer life, total and permanent disability, and income protection insurance. Sometimes the cover offered is a default cover based on your age. Review your insurance needs to ensure you’re adequately covered based on your circumstances and without eroding your super balance unnecessarily.

4. Check… to make sure you have a beneficiary nomination

Super isn’t automatically covered by your Will, so complete a death benefit nomination form as per your wishes to help ensure your super and potentially life insurance proceeds go to your loved ones as you intended.

5. Check… your details to make sure they’re up to date

This will ensure you’re kept up to date with important information from your super fund. Simple things like ensuring you have provided your tax file number can save you from unintended losses.

By taking action on these tips, you can feel confident knowing that you’ve made these steps and that your super is in tip top shape for the year ahead!

It’s an investment your future self will thank you for!

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

The image of a standalone family home with a spacious backyard for the kids to play and a barbecue area for weekend gatherings was once the status symbol of society. An indicator of success and stability for all who held the title (deed).

Has this dream now been retired to its resting place alongside the black and white televisions, typewriters, and telephones with cords that once lived inside these homes?

The Great Australian Dream – A Historical Perspective:

The post-war era saw Australia rebuilding and reimagining its future.

Owning a home became more than just a need; it was a symbol. It influenced family dynamics, career trajectories, and even the layout of our cities. Suburbs sprawled, and the housing market boomed, fuelled by this collective aspiration.

The Modern Australian – A New Dream Emerges:

As the world shrunk with globalisation, Australians were exposed to diverse lifestyles. Cities became melting pots of cultures, ideas, and aspirations.

The rise of remote work, the allure of freelancing and the gig economy, and the charm of being a digital nomad (#laptoplifestyle) made it less appealing for many to be tied with a mortgage to one place.

The value shifted from owning a patch of dirt to experiencing all that life and the world has to offer – be it a jazz bar down the lane, a pop-up art exhibit, or the freedom to pack up and travel on a whim.

As a result of this new trend, more and more individuals are now choosing freedom over stability, renting for life over buying a home, or investing rather than paying off a hefty mortgage.

This shift in mindset is not just a fleeting trend but a conscious lifestyle choice for many. But what drives this decision?

Pros of renting for life:

• Flexibility and mobility: One of the most significant advantages of renting is its flexibility. Without being tied down to a mortgage or a specific location, renters can easily move cities, neighbourhoods, or even countries. This mobility is especially beneficial for those whose careers require frequent relocations or those with a wanderlust spirit.
• No maintenance hassles: Owning a home comes with its fair share of responsibilities, from fixing leaky roofs to mowing lawns. Renters, on the other hand, are often free from these burdens, with maintenance issues typically being the landlord’s responsibility.
• Financial flexibility: Without the commitment of a hefty down payment and ongoing mortgage repayments, renters often find they have more disposable income. This can be channelled into investments, travel, or other life experiences.

Cons of renting for life:

• No asset accumulation: One of the most significant drawbacks of renting is the lack of asset accumulation. While homeowners build equity in their property over time, renters do not have this advantage. The money spent on rent does not contribute to an investment that can appreciate over time, and you are unable to benefit from your own home being Capital Gains Tax free.
• Lack of stability: Renting can sometimes mean a lack of long-term stability. Leases can end, rents can increase (which we are currently experiencing on a massive scale), and there’s always the possibility of needing to move on short notice. This becomes particularly relevant in our later years when our ability and/or desire to be mobile and flexible has likely reduced.
• Limited personalisation: Renters often have restrictions on how much they can personalise or modify their living space. This limitation can be a drawback for those who wish to make a space truly their own.

The decision to rent for life or pursue homeownership is deeply personal. It depends on individual priorities, financial situations, and life goals. While renting offers unparalleled flexibility and freedom, homeownership provides a sense of stability and long-term investment.

Ok, maybe it’s a little soon to be retiring ‘The Great Australian Dream’ just yet.

While this dream is still alive for many, it’s important to recognise that it has competitors – new dreams shaped by modern values, aspirations, and global influences.

Neither is superior; they’re simply different paths to the same goal – a life of fulfilment, joy, and contentment.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser. 

Regardless of the type of work you do, there is always a possibility of falling sick or getting injured. That’s why every Australian workplace has a health and safety obligation to provide safe work premises, assess risk and have workers’ compensation insurance.

What is workers’ compensation?

Workers’ compensation is a form of insurance payment paid to employees if they are injured at work or become sick due to their employment. Payments may cover:

• wages while you can’t work
• medical expenses and rehabilitation costs

The injury or illness must be work-related to receive workers’ compensation benefits.

If you’re self-employed, a sole trader or an independent contractor, you may need to arrange your own workers’ compensation cover.

Protection at work

A report released by Safe Work Australia in 2023¹ showed:

• 5% of the working population experienced a work-related injury or illness in 2021-2022 (497,300 workers),
• Only 31% of workers received any form of workers’ compensation for their injury or illness.

Whilst workers’ compensation offers some level of protection, it still only protects you for injuries or illnesses that occur at work or as a direct result of work – and then any claim made must meet eligibility requirements. In Australia, entitlements and eligibility for payments vary from state to state. If you suffer from an injury or illness that does not qualify for a workers’ compensation payment, there’s a real possibility that you could be left without income and with large medical bills.

The best way to cover the gap

While workers’ compensation is beneficial, it may not provide enough financial support for you and your family, even if you have a successful claim.

Considering that the vast majority of Australians suffer from injuries and illnesses not related to work, relying on workers’ compensation alone may leave you short on financial protection.

So, how can you ensure you still have an income when you can’t work?

Income Protection

Income Protection goes to work when you can’t and can cover you for well beyond what worker’s compensation may provide.

• It replaces a percentage of your income if you suffer from any sickness or injury, both at work and outside of work
• It covers you for both temporary or permanent disability
• You’re covered 24/7, worldwide
• You can generally get cover if you’re an employee, contractor or self-employed
• Premiums can be tax-deductible to you subject to the ownership structure
• Policies can be tailored to meet your specific needs.

Although workers’ compensation might provide some coverage for injuries and illnesses sustained at work, including Income Protection in your personal protection plan can give you peace of mind, knowing that you’re covered in various situations, both at and outside of work. This way, your ability to earn an income will be secured.

If you want to explore your options for Income Protection, get in touch with your financial adviser today.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 https://www.safeworkaustralia.gov.au “Analysis of ABS Work-related injuries survey data, 2021-22”

The first quarter of 2024 saw the Government roll out considerable changes to the Stage 3 Tax Cuts, inflation continuing to slow but remaining stubbornly high across some areas, surging stock market highs and continuing pressures in the property sector.

Government Overhauls Stage 3 Tax Cuts

In January, the Labor government unveiled changes to the proposed stage 3 tax cuts, aimed at providing bigger tax cuts to middle Australia. The new changes, which passed the Senate to become law in February, retain the tax bracket that would have been scrapped under the original proposal and adjust tax rates to benefit both lower and higher-income earners.

The changes will take effect from July 1 and are summarised as follows:

Inflation continues to ease

Inflation continues on a downward trend, with the RBA expecting it to return to the target range of 2-3% in 2025 and reach the midpoint in 2026.

Service price inflation remains high despite goods price inflation decreasing, supported by continued excess demand and strong domestic cost pressures.

The RBA expects the consumer price index (CPI) to come in at 3.3% by June, compared with 3.9% forecast three months ago. As a result, the board decided to leave the cash rate unchanged at 4.35% at the first official meeting for the year.

Share Market Highs

Global share markets have been breaking records this quarter, with the ASX200, S&P500, Eurozone and Japanese markets reaching record highs, helped by US inflation data coming in as expected, leaving the US Federal Reserve on track to cut rates from mid-year.

Whilst economic growth both locally and globally is forecast to slow, there is optimism in the market as inflation has started easing and is likely to continue falling. Central banks across the US, Canada, and Europe are expected to start cutting rates in the coming months. Recession still looms as a risk, but it appears the economy may be moving toward a soft landing.

Housing market continues to tighten

The national vacancy rate fell to a new low of 0.7% in February, highlighting the ongoing supply and demand challenges in rental properties across Australia, as a result of a construction sector under strain, rapid population growth from migration, and rising urban property prices.

Whilst the government has put stricter measures on international students to try to ease demand pressures, supply continues to be an issue, with building approvals falling by 15 in January, though multi-unit dwelling approvals increased by 19.5% in the same period.

Property prices continued to rise despite higher interest rates, inflation and cost of living concerns. The Home Value Index was up 0.6% nationally in February and showed an increase in all capital cities except Hobart.

Labour market cooling

Labour market conditions cooled over the December quarter 2023, with an ongoing shift away from full-time employment, growth in part-time jobs, and a decrease in recruitment activity. These trends are consistent with Treasury forecasts that growth will continue to ease, and the unemployment rate will increase from 3.9% in January to 4.2% by June, and 4.3% by the end of the year.

Despite clear softening, labour market conditions remain tight, and many employers are experiencing challenges finding suitable workers to fill positions, while some shortage pressures remain evident.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

According to the Australian Bureau of Statistics (ABS), Australia’s national gender pay gap is 12%. As of November 2023, the full-time adult average weekly ordinary time earnings across all industries and occupations were $1982.80 for men and $1744.80 for women. In other words, for every 100 cents on average men earned, women earned 88 cents. That’s $238 less than men each week. Over a year, this difference adds up to $12,376¹.

The ABS data:

• estimates full-time weekly base salary employees in the public and private sectors,
• excludes overtime, pay that is salary sacrificed and superannuation,
• excludes junior and part-time employees.

Australia recently, for the first time, released data² reflecting the gender pay gap of every private company with 100 employees or more, at nearly 5,000 companies. Dozens of these Australian businesses have gender pay gaps of over 50%. These pay gaps are not reflective of companies paying male and female employees different amounts for the same work (which has been illegal for more than 50 years), but mostly represent men working in higher-paid roles within a company. More than 3,000 employers, or 61.6%, had a gender pay gap that favoured men. Meanwhile, 30.1% (1,493 employers) had a neutral gender pay gap, defined as a gap of 5% or lower, and just 412 employers, or 8.3% of the total, had a pay gap that favoured women³.

The Workplace Gender Equality Agency (WEGA) explains its methods for calculating the pay gap as follows: WGEA used remuneration information supplied by employers in the 2022-23 employer census to calculate employer gender pay gaps. Part-time and casual salaries are converted into annualised full-time equivalent earnings. This year, the data excludes salaries of CEOs, heads of business, casual managers, employees who were furloughed, and employees reported as non-binary, as this comparison is between women and men.

State gender pay gap data

Australia’s base salary gender pay gap differs significantly by state. As of November 2023, the gender pay gap is⁴:

• 11.0% in New South Wales
• 10.7% in Victoria
• 11.5% in Queensland
• 9.2% in South Australia
• 21.7% in Western Australia
• 5.4% in Tasmania
• 15.4% in the Northern Territory
• 10.3% in the ACT

These differences can be partly explained by the industry profiles of each state and territory. The full-time workforce in Western Australia, for example, has a larger share of mining and construction than in other states. These two industries have relatively high earnings and low representation of women.

Industry gender gap gaps

Australia’s base salary gender pay gap is⁵:

• highest in Professional, Scientific and Technical Services
• lowest in Public Administration and Safety.

In the past year, the ABS data shows significant reductions in the gender pay gap in Construction, Transport, Postal and Warehousing, Retail and Wholesale Trade.

However, increases were recorded in Professional, Scientific and Technical Services, Arts and Recreation Services, Manufacturing, Electricity, Gas, Water and Waste Services, Accommodation and Food Services, and Other Services.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 https://www.wgea.gov.au/data-statistics/ABS-gender-pay-gap-data
2 https://www.wgea.gov.au/data-statistics/data-explorer
3 https://www.theguardian.com/world/2024/feb/27/australia-gender-pay-gap-new-data-wgea-men-women-salary-difference
4 https://www.wgea.gov.au/data-statistics/ABS-gender-pay-gap-data
5 https://www.wgea.gov.au/data-statistics/ABS-gender-pay-gap-data

Generally speaking, we Australians are pretty financially savvy, that is, we understand the how and why of effectively managing our money. Unfortunately, that doesn’t mean we put that know-how into practice to make astute financial decisions.

According to the Australian Bureau of Statistics (ABS), the average Australian household debt has risen by 7.3% (over $260,000) in the 2021-2022 financial year¹. As of July 2023, Australians were paying $18.4 billion² – that’s billion with a B – in credit card interest every year.

As parents, we are role models, integral to shaping our children’s values and beliefs. Like little sponges, they absorb our behavioural patterns, pick up on signals, and mimic our actions.

For us to replace bad money habits with good ones may be a big ask, particularly as they’ve evolved throughout our lives. But the trouble is that kids are a cluey bunch, eager to learn from us, and not surprisingly, our money habits are among many characteristics we unintentionally pass onto them.

Of course, we all want the best for our children. But in this busy world, we’re pulled in so many directions at once that sometimes juggling our daily work, family, school, and social lives is all we can do. Who has time to consider the inadvertent messages we could be sending?

Yet, when it comes to ensuring our children are equipped to build themselves a secure financial future, it’s worth the effort, right?

The table below shows a list of poor money habits and alternative better money habits that we can aim to model for our kids³.

If we can make time to examine the way we view and use money and replace poor habits with better ones, we can positively influence our kids by:

• emphasising the importance of planning early in life,
• encouraging them to make informed decisions,
• empowering them to set goals and work towards achieving them.

As parents, we have a limited opportunity to equip our children with tools like, knowledge, confidence and forward-planning skills – before they decide they know more than us!

So, by modelling good financial behaviour ourselves, we can instil the habits that will set our children up for a life of financial freedom.

I don’t know about you, but if I can achieve that, I’ll know that I’ve done what I can to enable the next generation to succeed and thrive.

What a legacy!

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 www.abs.gov.au “Average household debt grows by 7.3 per cent”, 13 December 2022
2 www.finder.com “Australian credit card and debit card statistics
3 https://moneysmart.gov.au/family-and-relationships/teaching-kids-about-money

The Australian Bureau of Statistics report our saving ratio is at a 17-year low – just 1.1% of total disposable income¹.

Almost half (45%) of Australians have less than a grand in savings to fall back on², according to recent Finder’s Consumer Sentiment Tracker findings.

On average, those surveyed with less than $1000 had just $210 in savings. That’s just over half the average $532.20 per week Australian households spent at the grocery store in 2023³. And 20% of those under $1000 said they had nothing.

Unsurprisingly, 76% of respondents said their current financial situation stressed them – but the survey also found a staggering difference between the haves and have-nots.

Finder said that according to their research, the national average for savings was $36,095, thanks to “super savers” propping up the numbers. Once the 45% with less than $1000 are left behind, the remaining 55% average $65,078, which is about two-thirds of the average Australian full-time salary of $98,217.

But Finder head of consumer research Graham Cooke said Aussie households were nonetheless facing tough times.

“Millions are living pay to pay, with many running out of money long before they run out of month. Cost of living pressure in Australia is at a record high, which is why so many Aussies having no savings buffer is a huge concern,” he said.

“Even something as trivial as a flat tyre would be too much for many households right now. Those lower levels of savings mean people are much more likely to have to turn to credit cards, loans, and buy-now-pay-later products to get by,” he said. “Whilst these products can be great if used properly, they can quickly get out of hand if relied on for everyday expenses.”

Ideally, you should aim to have at least three months of income as a savings buffer to fall back on.

He urged people to find ways to reduce expenses and increase their income streams to get them closer to their savings goal. “Find what savings you can create in your everyday expenses – $50 shaved off your monthly car insurance bill could equate to an extra $600 by the end of the year.” Once you start building up your savings, “A high-interest savings account is designed to build up your savings and earn more interest than a standard bank account. A recurring investment of $100 a week into a high-interest savings account paying 5.5% interest would amount to $2642 in two years.”

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 https://www.sbs.com.au/news/podcast-episode/savings-all-gone-youre-not-alone-and-its-intentional-says-economist/21anhicyt
2 https://www.9news.com.au/national/millions-of-australians-less-than-1000-dollars-in-savings/
3 https://www.finder.com.au/budgeting/average-grocery-bill