Raise your hand if you’ve ever spent your paycheck within a week of receiving it? You’re not alone.
According to new Mozo research, a worrying 1 in 2 Australians are saving less than $200 a month, with 16% of those aged between 25 - 34 confessing to running out of money before payday.
And when times are tough, the research found that Aussies are choosing to cut back on groceries rather than reduce their internet and mobile usage or paid TV subscriptions.
“Mozo’s latest research indicates that many Australians are struggling to make it to payday, with half of the country scraping away $47 in savings a week. With stagnant wage growth and the cost of living steadily increasing, it’s little wonder that many Australians are finding it hard to get ahead,” said Mozo spokesperson, Gemma Rasmussen.
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When it’s time to go cold turkey on life’s little luxuries, eating out or takeaway meals came in as the number one choice for expenses to go without. This was followed by hitting up the movies and purchasing new clothing.
Staple purchases such as fuel and cleaning products were ranked last, suggesting that Aussies are keener to cut back on frivolous spending first.
However, Rasmussen has reminded Aussies of the importance of thinking long term come pay day.
“Payday can bring an undeniably good feeling, and having enough money to see out the end of the month can often feel like tomorrow’s problem,” she said.
“That said, the stress of seeing your bank balance whittling down to zero before your next paycheck is due to arrive can be dire, not to mention the broader long term problems that arise, such as mounting debt and no savings.”
Budgeting, or a lack of, was also a cause for concern, with the data revealing 29% of Aussies either had no budget or had only a rough idea of their finances in their head.
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Getting back on track
Think it’s time you went back to basics by creating your very own budget? Check out Mozo’s top budgeting tips!
- Dissect your spending: When building your budget, categorise your spending: household, food, transport, entertainment and personal spending. It’s a lot easier to see what you’re working with up close, instead of estimating your monthly spend.
- Second guess the plastic: If you think your credit card is holding you back from hitting savings goals, consider whether it’s worth ditching debt with a balance transfer credit card or only opting to use your debit card at checkout.
- Make saving compulsory: Even saving as little as $50 a month can make a world of a difference in a year, so be sure to choose an amount that’s realistic for you and put it aside every payday.
Need a place to stash your hard-earned savings once your budget is underway? Our savings account comparison tool compares more than 200 savings account from 60 banks, so you’re bound to find the one that’s right for your savings goals!