Australians plan to keep a lid on debt and build a substantial savings buffer over the coming year according to the latest ING Financial Wellbeing Index.
The comfort level of households with mortgage debt has hit a record high with 64% of Australians ‘very comfortable’ with their mortgage as they prioritise building cash savings.
Other key findings in the survey show that:
- one third aim to build savings, but as high as 39% of Gen Y households aim to do so (aged 18-34 years)
- the average savings target for the year is $15,200 which is about three months wages on average.
- while 64% are ‘very comfortable’ with their mortgage, a huge 93% are ‘comfortable’
- 49% of households with a mortgage are ahead on their repayments – the highest on record
- a little over one third of all households are better off than a year ago, but just under a quarter are worse off.
The Gillard Government will be hoping this optimistic consumer sentiment is translated to the ballot box later this year.
The primary financial goal for 37% of households is to pay down or avoid debt, with the figure rising to 46% amongst Gen X households (aged 35-49 years).
People are wanting to save for a variety of reasons. About 40% say it’s because they can afford to do so, while others are concerned about job security and where the world economy is heading.
The Financial Wellbeing Index also shows that we save in a variety of ways:
- 41% by following a stricter budget routine
- 39% will cut discretionary spending
- 29% through a regular savings plan, and
- 15% will cut down on holidays.