5.9 million Australians live pay to pay

10 July, 2019, Sydney, Australia – Almost half of Australians are living from pay to pay, according to Finder, Australia's most visited comparison site.

The new figures from a Finder survey of 1,780 Australians reveal 46%, the equivalent of more than 5.9 million working Aussies, are unprepared to cope with a job loss, admitting they couldn't survive financially for more than a month if they suddenly lost their job or could no longer work.

A startling 2.1 million are living day to day, predicting they could only make ends meet for a mere seven days or less should they be laid off or not be able to continue working.

Just 37% of Australian workers could live off their savings for four months or more if they lost their job tomorrow.

Sophie Walsh, personal finance specialist at Finder, said the figures paint a troubling reality.

"Millions of households are struggling to make it to payday every month. That's a very stressful way to live, knowing any unexpected expense could pull the rug from under you," she said.

Walsh said many Australians were struggling with rising everyday living expenses and paying for bills such as their rent or mortgage, energy and even groceries.

"We know many Aussies are putting a large amount of their pay towards essential living costs, which doesn't leave a lot of wiggle room for an unexpected financial emergency.

"If you suddenly could no longer work or lose your job, the bills will keep rolling in so it's a good idea to mitigate the risk of something going wrong by making a conscious effort to pay down any debt you might have and put aside what you can each month into an emergency savings fund," she said.

Walsh said income protection insurance could be valuable for Australians who are reliant on their income.

"It keeps up to 85% of your income coming in if you get injured or fall ill and are forced to stop working.

"This is arguably one of the most important types of insurance because without it, you may not be able to afford all the necessities of life," she said.

Tips to reduce your debt and build your savings:

• Review your spending. No one needs to be told to spend less or to not buy coffees. But you do need to know what's coming in and out. By tracking your spending you'll have an idea of how much you can afford to put away into an emergency savings fund.
• Create a budget. The truth is that having a budget doesn't mean you need to cut out "bad" spending. Instead, you should simply budget for it. Set yourself a daily, weekly or monthly allowance for certain expenses and then stick to it.
• Get a budgeting buddy. It could be a partner, friend, family member or almost anyone else in the same boat as you. They can help keep you on track if you find yourself backsliding or overspending, so don't underestimate the power of moral support. You can learn from each other, too.
• Focus on paying down your debt first. If you have credit card debt lingering it's a good idea to focus on paying this off first before building your savings nest egg. The average credit card purchase rate is 17%, while the average online savings rate is around 0.85%, so use any spare cash to pay off your credit card debt as soon as possible.