HOW MUCH YOU SHOULD HAVE IN SAVINGS - AND HOW YOUR BANK BALANCE COMPARES TO THE AVERAGE AUSTRALIAN

•  Average savings by age revealed

Australia's cost-of-living crisis has highlighted how hard it is to save up.

While inflation is moderating, the rising cost of goods and services after Covid lockdowns depleted savings. 

Someone who lost their job or suffered a major illness would have less available in an emergency fund to draw upon. 

That meant the need to have money in the bank for those financial emergencies with renters and home borrowers both being squeezed. 

Then there is the need for savings to meet financial goals like saving up for a mortgage deposit or an overseas holiday. 

While the average Australian has tens of thousands of dollars in savings, four in 10 people have less than $1,000 in the bank.

Finder's money expert Rebecca Pike said saving up was particularly hard for young people.

'The Gen Zs, even younger millennials, are kind of really just starting out and they're starting out at a hard time as well,' she told Daily Mail Australia.

What is the average level of savings by age group?

Australians have an average of $41,023 in the bank, a Finder survey of 1,013 Australians taken in early 2025 found.

But Generation Z consumers, born since 1997, had the lowest savings level of $20,766 with Australia's youngest adults more likely to be battling soaring rents.

'They will have the challenge of probably earning less but they also haven't had the time to build up their savings so any extra costs they're having to face at the moment, they just won't have the back-up to lean on,' Ms Pike said.

'They're not having that financial buffer behind them.'

Generation X Australians, born from 1965 to 1980, had the highest savings level of $49,777 despite being the demographic more likely to be paying off a mortgage.

The oldest member of this group are turning 60 this year, which means they can access their superannuation to retire. 

Millennials, born from 1981 to 1996, had $44,276 in average savings as the group most likely to be paying a greater proportion of their income on mortgage repayments.

Baby boomers, born from 1946 to 1964, had the highest average savings pool of $49,669 as the only generation where everyone is able to access their superannuation.

'The older generations have had time to build up their savings, they've got more equity in their home,' she said.

'Many of them may have paid off their home loan and if they are investing, they've been able to see gains from that over time.' 

Those born in 1968, who are turning 67 this year, are also able to access the age pension, which can be combined with superannuation.

While older Australians are more likely to have savings, a staggering 38 per cent of people have less than $1,000 in the bank, with renters more likely to be in this situation.

'Two in five Australians have less than a thousand dollars which means that there is a huge cohort, they're probably living pay cheque to pay cheque,' she said.

'They're probably scrimping and saving what they can.

'Of the people that have less than $1,000 in savings, the average is like $120 so they're having to be really specific about what they can afford each week, each month.

'For those people, having a savings goal isn't necessarily an easy thing - they just don't have the money spare to save so it would be really tough for those people.'

How much do you need to for an emergency?

The Commonwealth Bank, Australia's biggest home lender, recommends having enough savings in an emergency fund to cover three to six months' worth of expenses in the event of a job loss.

This is especially the case if someone has children.

Ms Pike said an emergency saving pool would typically consist of several months of pay before tax.

'You want three to six months of your salary saved up so that if you were to lose your job, if you were to get physically unable to work, you would be able to get by for a few months,' she said.

Term deposit accounts pay higher levels of interest, often at 4.7 per cent, but charge fees if someone withdraws before the maturity date. 

The major banks offer the option of having money from the everyday transaction account diverted to a term deposit account after pay day, which takes away the temptation to overspend on luxuries like restaurant meals.

'Sometimes, it's removing that temptation or removing the ability to be able to do it, will help,' she said.

'If you know it's going to keep you away from that money, then it might be a good solution for you but you need to know that you won't need it in that time you shut it away.

'You've got to make sure that you're not going to desperately need that money and an emergency bill isn't going to come in that you can't afford to pay because your money's locked away.' 

Having a savings goal

Saving up for a mortgage deposit or a big purchase like a new car or an overseas holiday requires discipline. 

Ms Pike said saving for a particular goal would require setting aside 50 per cent of pay for housing costs, electricity and water bills and grocery costs; plus 30 per cent for wants and the remaining 20 per cent for an emergency or savings goal.

But if someone wanted to save up for a mortgage deposit or an overseas holiday, they would have to set aside 50 per cent of their pay for living costs and just 20 per cent for luxuries, with the remaining 30 per cent going towards saving for a big purchase or a rainy day. 

'If you have a couple of different savings goals - say you are saving to buy a house - you should also separately have a saving goal of keeping that emergency buffer,' she said.

Australia's median house and unit price was $825,349 in April, CoreLogic data showed.

From January 2026, all first-home buyers would be able to get in with a 5 per cent deposit and not have to pay lenders mortgage insurance.

So, 5 per cent of $825,349 is $41,267.

For those who have already owned a home, they would need a 20 per cent deposit of $165,070 to get a mortgage without having to pay lenders mortgage insurance.

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2025-05-09T00:59:50Z