With the ever-increasing cost of living in Australia sometimes saving some extra cash can seem like quite the daunting task. Understanding what the right amount to save simply comes down to each individual’s goals in life. Personally, I’d feel anxious if I had less than $30,000 in savings. To me, it seems like the right number just in case things go wrong in life. Thankfully I am doing much better than that but the question is how do you compare and how much does the average Australian save? Well, quite surprisingly more than I initially would have guessed but the average Australian saves $427 a month or just a tad over $5,000 of savings per year.
Sounds a lot in the grand scheme of things but what on earth does $5,000 buy nowadays? Not a lot to be honest but on the brighter side of things we Australians are doing a much finer effort than anyone has done in the last 30 or so a year with saving being at its highest point since the 1980’s. As interest rates dropped from the 1970’s to the 2000’s Australians saw a major decline in savings as they opted to take the option of using someone else’s money, that pesky old credit! By the early 2000’s Australians were barely saving any cash what so ever.
When did this all turn around? Thank the good old global financial crisis of 2007 that sent everyone around the world into a perpetual motion of savings and pulling on the reigns of spending. From that time the savings rate for Australians has hovered around the 12% mark of disposable income. Even though they are busy spending their hard earned cash on avocado toasts and latte’s people between the ages of 25 and 34 are actually the best savers of any demographic. On average those within this age group save around $533 a month. This probably has a lot to do with the average age that kids move out of home is increasing as well.
It is also no surprise that the more money you earn the more you save. With those that earn in the top 20 percent save 15 percent of their disposable income, doubling the median rate of savings. So the question is how do you compare to others when it comes to savings. I know my family is a little higher than that but that’s because I am a massive tight arse and this was only learnt from the lesson of being made redundant close to 6 years ago now. The best life lesson I have gotten so far about respecting the value of money.
10 Practical Tips for Saving Money
- Stop buying coffee, you snob. Nescafe went to great efforts into getting to that 43rd blend. Seriously though if you buy coffee every day, you are literally spending $1500 a year on coffee, that’s mental!
- How far do you live from work? If you live less than 10 km’s get off your arse buy a pushy and save on the petrol, the parking and road tolls. I have saved thousands over the past couple of years by this one option.
- Go vegetarian and eat like someone from the third world. Whilst I am vegan for ethical reasons one of the main wins from this decision was the amount we saved on buying meat. Well if not vegetarian try meat-free days and you will save yourself at least $50 a week.
- If you have kids, rather than buying them new toys, join up to a toy library. For a small annual fee, you can take home, in our case 3 to 4 awesome toys a month. So when your young one gets bored and fed up with the toys you just swap them and kapow happy child!
- Sell some of the random shit you have around your home. Yes, you might be getting a general trend here, but I am a minimalist. Which means I hardly own anything. I don’t poo poo materialistic things, I just don’t value them. Try selling some of the crap you have lying around the house. The last time we move, we downsized and the stuff we sold paid for our move.
- Bring your lunch to work. Don’t buy takeaway at work. It’s such a damn waste. I have gotten my lunch down to an art form where I spend $3 a day. RIght now I spend zero as I am doing the one meal a day diet, but that’s another story.
- Change where you shop for groceries, if you have an Aldi near you. Shop there it will save you 20-30% on your grocery bill. Again stop being a snob and save.
- Throw dinner parties rather than going out. You’ll save on food and the booze.
- Stop drinking soft drinks or any other drink that is not water. Try it for a week drinking nothing but made at home/work coffee and water. You’re guaranteed to save a small fortune.
- This is not a savings tip but an earnings one. Try starting a side hustle, something a little on the side. Take for example my wife she has a part-time job, plus she sells flower crowns online at her Etsy shop and online store.