How much money should I have in savings?
See how much money people your age have in savings, and learn how to boost your savings balance if it's below average.
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The amount of money you should aim to have in your savings will depend on your income, your living expenses, your age and your savings goals.
Let's take a look at the average savings for Australians in each age group so you can get an idea of where you're at. If you're a bit below the average, don't worry, we'll also outline ways to boost your savings balance.
standard variable rate
Savings account offer
If you’re between 18-29, you can earn a 3% p.a. variable rate each month you grow your balance (excl. interest) and make 5+ settled debit card purchases from your linked Westpac Choice account, up to a balance of $30,000.
- Maximum Rate: 3% p.a.
- Standard Variable Rate: 0.2% p.a.
- Monthly deposit required: $1
- Monthly fees: $0
How much should I have in my savings?
You should aim to have at least three months (and ideally six months) worth of living expenses in your savings. This is to ensure you can get by if you were to suddenly lose your job or be out of work for another reason, such as health problems or a change in your personal circumstances. If you were to find yourself out of work, your standard living expenses like rent, mortgage payments, energy bills and grocery bills don't stop.
If your monthly living expenses are $2,000, you should aim to have $6,000 in your savings at the very least. If your living expenses are higher at, say, $4,000 a month, you should aim to have closer to $12,000 in your savings at any given time.
To work out your current living expenses you need to look at your bank statements and calculate how much is coming in and how much is going out each month. The amount that's left over (if there is any) is your monthly savings. The amount that's going out is how much you spend to live. If you don't want to sift through your past transactions to figure this out, the Finder app can automatically do this for you.
How much money do Australians have in their savings?
Comparing how much you have in savings against the average figure can be a useful way to see whether your savings are on track or not.
Finder data shows that on average Australians have $28,426 in cash savings.
Men have more saved than women, with an average of $36,178 in savings compared to $20,957 for women. However, this also changes greatly depending on age.
Here's how much money people in the following age groups have in savings on average:
- Aged 56-74: $40,463
- Aged 40-55: $34,025
- Aged 24-39: $22,532
- Aged under 24: $10,568
Average savings per age group and gender
As well as age, the average amount that someone has in savings also differs depending on gender. The following graph shows the average cash savings amount for each age group split by gender. This Finder data is based on responses from more than 18,000 Australians as of November 2020.
Our data shows that males aged between 56 and 74 have the most in savings with $48,644 on average. In comparison, females in this same age group have $30,162 in cash savings.
Even in the youngest age group, Gen Z, males on average have more than double the amount of money in savings than females with $16,349 compared to just $7,554.
How much should I save each month?
There's no magical number for the amount you should be saving each month (sorry!). But we can look at how much Australians save each month on average as a starting point.
Finder data shows that on average Australians save $717 per month. The average monthly saving for men is $839 and for women it's $598.
One popular method to figure out what you should be saving is the 50/30/20 rule. The 50/30/20 method suggests that 50% of your monthly income should go towards essential living expenses such as rent, food and other vital bills. Then, 30% of your income goes towards other non-essential spending like entertainment (hello, Netflix!), eating out, technology and weekends away. The remaining 20% of your monthly income should go towards your savings.
Using this method, if your monthly income was $3,000 you could aim to save $600 per month. And as your income grows, so should your savings. So let's say you get a big pay rise and your income is now $5,000 a month; your monthly savings should also be increased to $1,000 a month.
Of course, this method isn't set in stone so you're encouraged to tweak it until it works for you. You might even find that you can save a lot more than 20% of your monthly income. However, 20% is a good starting point to aim for.
How to boost your savings
If your savings aren't as high as they could be, don't worry, there are lots of ways to boost your savings. Here are a few to get you started:
- Open a dedicated savings account with a competitive interest rate. The better the interest rate on your savings account, the faster your savings can grow.
- Look for ways to reduce your spending. Take a look at your recent transactions for things you can easily cut out or cut back on. If you need some inspiration, here are 50 ways to save more money.
- Look for ways to increase your income. There are many ways to earn money from a side hustle. Consider selling unwanted items online, renting out a spare room or car space, driving for a ride-sharing company, doing freelance work in your industry or putting your home up for rent on Airbnb when you're not there.
- Compare and switch your services. From your health insurance to your energy plan, there are plenty of savings to be made by switching.
Boost your savings with a high interest savings account
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