Aussies 'need to get savings buffer in place'

Wednesday 20 May 2009

Article by Mozo

A lack of savings could be placing a significant number of Aussies at risk of severe financial hardship.

Research carried out by Bankwest reveals that although 43 per cent of people are currently struggling to make ends meet, just over half of consumers are yet to adjust their finances in response to the downturn.

However, as the crisis continues and unemployment rates are set to rise, the firm reveals millions of people do not have a financial buffer in place, with 38 per cent of respondents not saving any money on a monthly basis.

Meanwhile, less than a quarter are currently putting away more than ten per cent of their earnings, although searching for a high interest savings account could be an effective way to make the most of what cash is being set aside.

Ian Corfield, chief executive officer at Bankwest Retail, states: "In years gone by the prudent thing was to ‘save for a rainy day’ yet today it’s pouring cats and dogs yet few people are putting enough, if any, money aside to see them through unexpected financial emergencies."

Overall, 27 per cent of people do not have a savings buffer in place, despite 57 per cent claiming that financial security is "very important".

Writing for the Daily recently, Paul Clitheroe claimed that part of the nation’s debt problem stems from the fact that spending money is often seen as being more fun than saving.

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