How much do Australians have stashed away in their savings accounts as the cost of living soars?
In August, Australians saved an average of $40,000, representing a decrease in consumption.
Figure represents a 75 percent rise over the $22,565 stashed away in March.
As living expenses and food costs rise, more Australians have chosen to save.
As the cost of living climbs, Australians are saving more than ever before, with tens of thousands stowed away in their savings accounts.
Finder, a consumer tracking firm, discovered that the average American resident had saved $39,439 in August, a significant increase from even a few months prior.
This represents a 75 percent increase over the average $22,565 placed aside in March and a record high since Finder’s study began in May 2019.
Despite the rising cost of living, Australians are putting aside roughly $40,000 in their savings accounts, according to recent study (stock image)
Finder consumer tracking data reveals that the average inhabitant saved $39,439 in August (stock image)
Sarah Megginson, a money expert at Finder, explained that Australians are getting more frugal with their income.
She stated, “Australians are dramatically expanding their financial reserves to combat the spiraling cost of living.”
Consumers are anxious that high levels of inflation and rising interest rates may leave them vulnerable, so they are storing cash wherever possible to weather the storm.
Those funds would allow Australians to survive for 19 weeks without salary if they suddenly lost their jobs.
In August, men had greater financial reserves than women, with $52,786 against $24,132.
Ms. Megginson stated, “Saving a little is preferable to saving nothing; the habit of saving is most important of all.”
‘Now is a terrific moment to hold surplus cash in the bank, as high-interest savings accounts provide rates of over 3.1% per year, and term deposits give even greater rates.
While the RBA’s decision to increase the cash rate to 1.85 percent is bad news for borrowers, it is good news for savers.
The sum is a 75 percent increase over the average $22,565 saved aside in March and a record high since Finder’s research began in May 2019. (pictured, line graph of average amount of money held in savings)
The country’s inflation rate rose to its highest level in two decades, 6.1%, as a result of rising gasoline, housing, and food prices, sparking fears of a massive interest rate hike in August.
In the June quarter, the consumer price index rose at the fastest rate since the middle of 2001, while unemployment dropped to a new 48-year low of 3.4% last month.
Inflation is significantly higher than the Reserve Bank of Australia’s two to three percent objective.
A tight rental vacancy market and increasing energy prices led to a nine percent increase in housing costs from June 30, 2017 to June 30, 2018.
As a result of recent flooding, transportation expenses rose by 13.1%, while food prices rose by 5.9%.