Australians are 'least comfortable' with personal savings

Mozo

Wednesday 11 August 2010

Australians feel less comfortable with managing personal savings than any other aspect of household finances, it has been suggested.

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ING Direct’s latest Financial Wellbeing Index has shown that Aussies are in fact most comfortable with their home loans, with almost half of all mortgage holders ahead on their payments.

This contrasts with the savings situation, as the research found that one in four households has less than $1,700 in savings accounts or term deposits.

In a column for the North Shore Times, Paul Clitheroe, founding director of financial planning firm ipac, argued that while opting to pay off debt is “a very smart move”, saving is important too.

“Without the back-up of spare cash we’re vulnerable to unexpected expenses such as car repairs or an unusually large power bill,” he commented. “When that happens, we often reach for our credit card, undoing all the good work we’ve done paying off debt.”

Mr Clitheroe urged Australians to compare savings accounts, noting that even $20 deposited each week in a high-interest account is “a good start”.

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