A good time to save? Cost of living impacts household spending

Person considers whether to put apple into a basket or to save money due to cost of living crisis

Australians have been spending more on essential services and less on recreational goods this year, according to the Australia Bureau of Statistics (ABS) in August.

This means a 1.7% uptick has been seen in spending on things like health, food and transport services.

Meanwhile, spending on items such as clothing, furnishings and household equipment has fallen by 3.3%. 

Concerningly, the household savings to income ratio gap has widened to a level comparable to the global financial crisis (GFC) of 2008. 

This suggests Aussies are probably saving less because the cost of living keeps rising. For example, expenses like groceries have gone up, and home loan repayments are higher than they were at the beginning of the year for many.

“Spending on essential goods and services were the main contributors to the rise in household spending, while many discretionary categories detracted. The exception was spending on vehicles which rose 5.8 per cent as supply bottlenecks eased during the quarter,” says Katherine Keenan, ABS head of national accounts. 

It might be time to think more about savings

Woman is hunched over a table reading and thinking about saving money

Research from financial advisory Findex reveals a majority of Aussies surveyed have told family members about their goal to save and budget.

This determination to save might explain why consumer confidence has increased by 0.6 points this week, based on data from Roy Morgan.

But if you aren’t feeling confident about your financial circumstances for the foreseeable future or how much you’re able to save, it could be time to review your savings account.

At present, our database at Mozo shows many savings providers are offering interest rates above 5.00% p.a., which is pretty sound. So if, for example, you set aside $2,000 into a savings account with an interest rate of 5.00% p.a. and deposit $100 every month for a year, you could earn $130 in interest. That’s not too shabby.

Just note though, there are some conditions to be met in order to receive the full interest benefit - like depositing a minimum amount, or making a few transactions each month, for instance. 

Compare savings accounts

Thinking about changing your savings provider? Check out some of the best savings accounts that our experts at Mozo have tracked this month, or have a look at some options below!

Savings accounts comparison table - last updated 31 May 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.

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    Details
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

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    Details
  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend, Bills or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.

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  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

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^See information about the Mozo Experts Choice Savings Account Awards

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