a quarter of households in the Trans-Tasman nation can maintain their current lifestyle for only one month if they are to lose their income, while 11 per cent could only last two weeks. The report published by the Australian direct ban also revealed that 34 per cent of households usually spend all of their income although they did not overspend.
“With pandemic lockdowns continuing to occur across Australia, households with low cash savings are at significant risk, especially in instances of extended strict lockdowns like we’re currently seeing in New South Wales, Queensland and Victoria,” Jeff Oughton, ME’s consulting economist, said.
He noted that although financial comfort has significantly bounced back higher than pre-pandemic levels, a large portion of Australians remain highly vulnerable to a loss of income. “There are still sections of the population, for example single parents, insecure workers including casual and gig economy workers, the unemployed, and self-employed Australians, who aren’t feeling as financially comfortable,” Oughton noted. “These groups are highly susceptible to changes in government support and ongoing turbulence during Australia’s economic recovery.”
Meanwhile, ME’s money expert Matthew Read pointed out that inn these uncertain times, it is imperative to focus on what one can control, and a growing a stash of emergency money is good for a person’s peace of mind.
“Having emergency savings is one of the foundations of financial wellbeing and it can be more than a lifeline in a crisis. Psychologists say that having savings helps us feel more optimistic and in control,” he told news.com.au. “A handy benchmark to work towards is to have the equivalent of three months’ worth of regular expenses in your emergency fund. This can give you breathing space to pay bills, buy groceries, and keep up rent or home loan payments.”
