I love reading about all things money. One of the great things about being interested in smart spending and frugal living means I often stumble across money facts on a regular basis.
While comparison can be seen as a bad thing, I believe sometimes it can help motivate you to be better, especially if you are below ‘average’ (or above in the case of debt.)
When coming across these money statistics through regular reading and specific research for blog posts, I was shocked that even at the ‘average’ level there was so much room for improvement.
Read through these money facts and see how you compare.
Scary money fact 1 – 50% of Australians live paycheck to paycheck
According to research by MLC one in two Australians lives paycheck to paycheck. The survey showed that people wanted to ‘live comfortably’ and this meant spending more on eating out, the latest technology, and overseas travel; leading to having nothing leftover.
These statistics are a little scary. If you are one of the 50% living paycheck to paycheck I highly recommend you break the cycle as soon as possible. Even a small buffer can make a big difference when you need it.
If you are living paycheck to paycheck, I suggest trying to find a way to get out of this bad situation immediately. Having money set aside and a buffer can greatly help you in times when you need it.
Scary money fact 2 – 85% admit to living beyond their means
In the same survey from MLC when questioned, 85% of participants admitted to spending beyond their means. So not only are they living paycheck to paycheck, they are spending even more than they receive!
This leads to 42% of people relying on a tax refund to help pay their bills or credit cards. This sounds scarily backwards to me. If you don’t have the money now, stop spending it.
Scary money fact 3 – 23% have no emergency savings
Looking at the above two facts, with people living paycheck to paycheck or worse it isn’t surprising to find that in recent finder.com.au survey 23% of survey takers on had less than $500 to cover an emergency! That means these people would struggle to find the fund in the case of job loss, medical expenses not covered by Medicare, lost or stolen items or other unexpected situations.
I was happy to read though was that 41% would be able to handle a $5000 emergency, which is a much higher percentage than what I thought it would be. I would love to see this number increase.
The amount you need in your emergency fund will vary depending on your situation, however I believe that everyone should start with a base rainy day fund of $1000 and work up from there until you have 6 months’ worth of basic living expense covered.
Scary money fact 4 – Aussies have more than $32 billion in credit card debt.
The Australian Securities and investment Commissions (ASIC) credit card debt clock shows the average credit card has a balance of around $4,200. How many cards do you have?
What is worse is that they aren’t being paid off and the monthly interest charge is approx. $700 per year.
That is a lot of credit card debt. Most of this debt was made up of holidays including shopping and luxury accommodation.
If you find yourself swiping your credit card so often that you can’t pay off the balance each month I recommend you cut up that card and start living within your means. Imagine what you could do with an extra $700 per year being saved on interest (not to mention the original balance).
- How to avoid buying things you don’t need
- How to save more than $750 in the next 30 days
- My simple post it note budget
Scary money fact 5 – Aussie’s spend $1290 per annum on gambling
If you were to take that $1290 and invest it instead, after 10 years it would be worth $19,313.42 assuming a 6% return.
I know what I’d rather do with my hard earned cash.
Scary money fact 6 – The average household throws away $1,036 in food every year
According to Foodwise.com.au up to 20% of all food purchased in Australia is thrown away. This adds up to a huge $8 billion per annum worth of edible food going to landfill.
Some of the main reasons cited are;
- Buying takeaway at the last minute instead of cooking food already at home
- Not checking the fridge/cupboards before grocery shopping
- Throwing away food by mistake before the use-by date
If we only focus on the money side of things, this is a huge waste – not to mention the social and environmental impacts.
If this is you I suggest you do the opposite of the 3 points listed above as well as; have a plan for your food, write a list and stick to it and don’t go shopping when you are hungry.
Each individual can make a difference to these statistics and your bank account will notice too!
While the money facts in this post might scare you, I hope they can also inspire you to improve your finances. If you are already doing much better than the average, congratulations! Though as said above I think there is still a lot of room for improvement, so keep going.
If you are super competitive like me, being ‘average’ usually isn’t good enough anyway!
Are you as shocked as I am at these figures? How do you compare? Is there one rea you know you can improve in right now?