Aussies’ savings at dangerous levels

Australians’ financial health is in a worrying state, with many unable to weather even small financial shocks, according to new research.

Paul Feeney, co-founder of online financial planning service Map My Plan, says more than a third of Australians are holding precarious levels of savings.

“Thirty-six per cent of working Australians could only access $1,000 or less in the event of a financial shock, such as a medical emergency, without going into debt. Eight per cent could access nothing at all, which is unsurprising given 14 per cent save nothing each month,” Mr Feeney told Nestegg.

The alarming figures came from Map My Plan’s survey of more than 1,500 Australians into the country’s financial health.

“For me, financial fitness is around managing your current cash flow and the ability to absorb a financial shock, through savings or possibility a mix of insurance, [but] our survey shows us that we’re not even close to covering those things,” Mr Feeney said.

The survey scored Australians’ financial health a meagre 113.5 out of a possible 200.

“The most wealth-destructive thing people can do is to go overboard on your credit card and then trying to chase that thing down,” Mr Feeney said.

“It’s quite interesting to see that more than half the people who have credit card debt report they have actually got cash savings. Even though basic mathematics tells you to pay off that credit card, there’s a real reluctance for people to do that.”

Mr Feeney said Australians who want to maintain control of their finances need a financial plan.

“It can be hard to track where your money is going, but once you do you can control your finances and not the other way around,” he said.

“Our research shows that when people have a plan, their financial fitness level increases dramatically.”

Promoted Content
Recommended by Spike Native Network
MORE FROM NEST EGG
Superannuation, super fees, superannuation member, member fees, Rice Warner, retirement savings, retirement planning, wealth management
Jun 23 2017
Superannuation fees likely to decline
Superannuation member fees have fallen by almost a quarter of a percentage point in the last 10 year...
SMSF, Colonial First State, CFS, June 30, EOFY, End of Financial Year, trustees, non-concessional contributions
Jun 23 2017
Organise electronic transfers early, urges Colonial First State
SMSF trustees need to organise transfers for non-concessional contributions well in advance of next ...
Zenith, BlackRock, Vanguard, fixed income, bonds, bond investing, fixed income investing, bond fund, Jon Howie, Andrew Yap, Nathan Zahm
Jun 23 2017
What rising interest rates mean for bond funds
The capital value of your bond portfolio will take a hit as interest rates begin to climb, but the a...