Treat yo’ self: 4.4 million Aussies are squirrelling money aside for a vacation
More Aussies are saving for a holiday than building an emergency fund, according to new research by Finder.
A Finder survey of 1,096 respondents revealed almost 1 in 4 Australians (22%) – equivalent to 4.4 million people – are primarily saving for a holiday right now.
The research found 17% of Aussies are saving money to build an adequate emergency fund – equivalent to 3.4 million people.
Worryingly, 1 in 8 (13%) can't afford to save with everyday costs a growing burden.
Alison Banney, money expert at Finder, said Aussie savers have very different goals.
"The majority of Australians are building up cash – but where they are putting their money is varied.
"It's been a rough few years with Covid and the cost of living crisis, so many Aussies just want to take the edge off with a trip away."
Finder's research shows 1 in 10 (9%) are stashing their cash for a home deposit, while 5% are saving up for a car.
Offsetting a mortgage (4%) and saving up for a significant one-off purchase such as a designer bag or watch (2%) round out the top savings goals.
Banney said an emergency fund is more crucial than ever during the cost of living crisis.
"Many people's finances aren't faring too well right now and it can be hard to think about saving when you're living paycheck to paycheck.
"Your emergency fund should have enough cash to cover at least three months of living expenses.
"Having money set aside at your disposal for unexpected costs helps you become more financially resilient."
Banney urged Aussies to put their money aside in a high-interest savings account while they plan how to spend it.
"With lenders paying as much as 5.6% p.a. at the moment Aussies can reach their savings goals faster.
"Keeping up those saving habits might be harder right now, but the discipline of saving regularly adds up quickly in a high-interest environment," Banney said.
|What are you primarily saving for right now?|
|I'm not saving for anything in particular||25%|
|For a holiday||22%|
|To build an emergency fund||17%|
|I can't afford to save||13%|
|For a home deposit||9%|
|For a car||5%|
|I put my savings in an offset account against my home loan||4%|
|A significant one-off purchase (e.g. dream bag, watch, concert tickets)||2%|
|For a pet||1%|
|I don't care to save||1%|
|Source: Finder survey of 1,096 Australians, July 2023|
Here's 4 steps to building an emergency savings fund.