How much savings should you have?

Demographics such as location, household income, age and gender also play a part. 

See how your savings stack up and use our money-saving calculator to help you budget for your savings goals.

While you're busy trying to tuck your own money away, you might be curious to know how much money other Australians are managing to save.

According to the Australian Bureau of Statistics (ABS), savings vary by state and territory. Other factors that can affect your ability to save include: 

Every quarter, the ABS publishes stats on the household savings to income ratio. This ratio is calculated by taking the total savings of Australians and dividing by their total income. The higher the ratio, the more money people are saving.

In 2001, the average household savings to income ratio was around 3.2%. Before the global financial crisis in 2008, this number was in the negatives. Now, this ratio is around 0.6%[@article-abs-savings-stats], showing the increased pressure on households' ability to save. A contributing factor is the cost of living (inflation). 

More than 25 per cent of Australians nationwide have said they have less than a month's income saved up. 

Over 50 per cent of those surveyed said they have less than $20,000 saved. One in 6 – or around 3.4 million Australians, if you apply this estimate to the entire population – have less than $1,000[@article-infochoice-survey]. 

Having no savings can lead to significant financial distress. It can also leave one vulnerable in times of emergency, such as unexpected medical expenses or job loss. Without a financial cushion, individuals may resort to high-interest debt. This can create a cycle of financial instability and hinder long-term goals like buying a house or retirement.

You may have savings goals, but what about an emergency fund for unplanned expenses?

The Australia government's moneysmart website recommends to save enough to cover 3 months of living expenses. By separating this money into a separate account and transferring it automatically, even those small amounts can add up. If you put away just $20 a week, you'll have saved over $1,000 in a year. 

You might find it easier to stay on track if you use a savings goal calculator. See how compound interest works and how making regular deposits can grow your money.

Calculate your savings goal

Are you more likely to be saving for a car, education, home deposit, your next holiday or an emergency fund? Known as the 'life-cycle theory', we move through savings and spending patterns at different phases of our lives. Age therefore plays a large factor in savings goals[@article-lifecycle-theory].

Learning to manage money early on is an important step towards financial security, but it's never too late to start.

20s

According to the life-cycle theory, savings are usually low when your income is low. One-fifth of Gen Z – those born from 1997 to 2012 – say they have less than $1,000 saved; around 33 per cent have less than $5,000[@article-infochoice-survey]. 

30s and 40s

Savings rates generally go up during your higher-earning years. A third of Gen X have less than a month’s income saved. This could be on account of owning their home and mortgage obligations. On the other hand, those born between 1981 and 1996 are 30% more likely to save money than their parents' generation[@article-infochoice-survey]. 

60s 

The older generation are faring better. Almost one-third of Baby Boomers surveyed said they've saved up $100,000 or more. But while net wealth goes up, savings rates tend to decline in these years as we get closer to retirement[@article-infochoice-survey]. 

Learn more: Tips to plan for retirement

There are quite a few choices when it comes to saving money. 

There are quite a few choices when it comes to saving money. Most people are putting their money into savings accounts. Interest rates are higher than with an everyday transaction account. And most of the time, you can still access your funds in a savings account.

With a term deposit, you can put your money away for a set period of time – from as short as 1 month to up to 5 years. These also usually require a minimum deposit. Interest rates are fixed and generally higher than those of a regular savings or transaction account. 

As interest rates rise, many of us are putting our money into offset and redraw accounts. You can save more off your repayments than what you'd earn in either a savings or term deposit.  

Your retirement savings plan can also be used to save extra money, and it's tax-deductible. Add voluntary contributions to your super earlier – at least 10 years before you plan to retire – for the biggest benefits. 

Article first published January 2024