Strapped for cash? Some cities are the perfect places for saving.
Sometimes saving money is far from easy. When your income struggles to match your outgoing expenses, it can be very difficult to squirrel away any money each month.
But in many cities in Australia and around the world, the expensive cost of living means it can often be a challenge just to keep your head above water, let alone to build a savings balance. That’s why it’s worth looking around for an affordable city that offers all the features you need to save money and reach your financial goals.
What makes a city good for saving?
Are you looking for a city where you can save money? These factors can all help you build your savings balance:
Affordable property prices
Researching median property prices is an obvious place to start in your search for a city that suits savvy savers. The highly competitive housing markets in some Australian cities have made real estate extremely difficult to afford for many first home buyers, as evidenced by Sydney’s median house price hovering above the $1 million mark. And if you want to buy property in a city where prices are through the roof, you’ll most likely need to make a long-term commitment to paying off a home loan and therefore struggle to save money.
There’s plenty of easily accessible data online about the median rent prices charged in Australian cities and even in individual suburbs. Unless you have a mortgage, rent will probably be the largest ongoing expense that you need to manage, and if you’re paying more than you should be it can quickly eat into your budget.
In order to save money, you need to be able to earn an income, but cities with high unemployment rates can only offer limited job opportunities. If a city has low unemployment rates and plenty of career prospects, your ability to earn a stable income and put money aside for savings increases.
The greater your earning power, the more money you can afford to put aside into a high-interest savings account each week. Take a look at the median household income data for any suburbs or cities you are considering moving to; this will give you a clearer idea of the earning prospects of employees in the city, and once you know how much you could earn you can work out how much you could save.
Compare high interest accounts below
Cheaper transport costs
Whether you ride the bus to work or drive your own car, transport costs are another ongoing expense that will have a big impact on your weekly budget. For example, in the week ending 14 August 2016, the average weekly price of petrol in Brisbane was 110.4 cents a litre. During that same period, the weekly average price of petrol in Cairns was 198.8 cents a litre, which can quickly add up to a sizable amount of money if you’re filling up your car two or three times a week.
Your weekly grocery shopping is another big part of your budget, so compare any available figures on the cost of common groceries and household items in different Australian cities. This will give you a better idea of just how far your money will go and how quickly you will be able to build a savings balance.
Australia: not a cheap place to live
In Deutsche Bank's annual world consumer price index for 2014, Australia was once again named as the world’s most expensive country. The report showed that living in Australia was more than 12% more expensive than living in the US which, while far from ideal, was nonetheless an improvement on 2012, when Australia was 63% more expensive than the US.
Sydney and Melbourne came in at 5th and 8th on the list of the world’s most expensive major cities to live in, with only Singapore, Paris, Oslo and Zurich more costly than the NSW capital. By examining international measures of purchasing power parity (PPP), the report showed that everything from Coca Cola to public transport costs more in Sydney and Melbourne than in most other cities around the world.
And that’s before we even start talking about property prices. According to Domain Group’s June 2016 House Price Report, over the June quarter in 2016, Sydney’s median house price rose slightly to $1,021,968, while the median price for an apartment was $669,830.
Renting isn’t any cheaper, with the June Quarter 2016 Domain Rental Report putting Sydney’s median rent at $530 per week for houses and $525 for units, with Melbourne’s figures sitting at $400 and $380 respectively.
Finding a cheaper place to live
But just because some Australian cities regularly feature in lists of the world’s most expensive places to live, it doesn’t mean that you can’t find a place to live in an Australian city and still save money. Not only are other Australian cities like Brisbane and Adelaide much more affordable, but it’s also possible to find cheaper “pockets” to live in Australia’s more expensive capitals.
If you’re strapped for cash and you want to live somewhere where it’s a little easier to save money, you need to know where to look to find a cheaper cost of living. But in order for it to be a good place to save money, a city needs to boast the right combination of a wide range of unique factors. If you can find a city where property prices are reasonable and you can keep your everyday costs of living to a minimum, you’ll be much better placed to achieve your savings goals.Back to top
Finding the right place for you
It’s worth pointing out that it’s nearly impossible to find a city that offers the perfect combination of all the above factors. For example, if a city provides the potential for you to earn a sizable income, you can bet your bottom dollar that the increased housing demand this produces will drive up property prices.
The important thing to remember is that you need to find a place where you can not only live happily and comfortably, but where you can also put money aside on a regular basis. Once you’ve taken the time to consider your financial goals and what you’re looking for in a place to live, you’ll be able to decide on the best city to save you money.