How Australians are budgeting month-to-month

According to Finder, its survey of 1,780 Australians revealed that most Australians are unprepared to cope with a job loss.

Sophie Walsh, personal finance specialist at Finder, said the figures are worrying.

“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.

Ms Walsh believes the rise in everyday expenses, such as paying the rent or mortgage, energy and groceries, were adding to Aussies’ pain.

“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.

Expert’s tips

1. Review your spending – Track your spending, as you’ll have an idea of how much you can afford to put away into an emergency savings funds.

2. Create a budget – This doesn’t mean you need to cut spending, instead it allows individuals to set an allowance on their spending.

3. Get a budget buddy – Don’t underestimate the power of moral support; having someone to keep you on track can be a big motivator.

4. Focus on paying down your debt first – The average credit card purchase rate is 17 per cent, while the average savings rate is 0.85 per cent. So, use spare cash to pay off credit card debt as soon as possible.

Full Article: https://www.nestegg.com.au/planning/13382-5-9-million-australians-live-pay-to-pay