New research has revealed that on average Australians have just under $40,000 in their savings account, but there are big discrepancies by age and gender.
According to Finder research, the average person has $39,439 in savings as of August.
That’s a 75 percent increase in just six months: The average in March was $22,565. It’s also at its highest point since Finder began tracking savings in May 2019.
Sarah Megginson, a money expert at Finder, said the economic downturn is behind a rise in people holding on to their cash.
“Australians are dramatically increasing the amount of cash they have stashed away to offset the spiraling cost of living,” he said.
“Consumers are concerned that high levels of inflation and rising interest rates are leaving them vulnerable and, where possible, are stocking up on cash to weather the storm.”
But when broken down by age and gender, that overall average changes dramatically.
While the average Australian man has $52,786 in his savings account right now, the average woman has around half that figure: $26,132.
The difference in savings is even greater among millennials, with men saving 68% more than women. Generation X has the second largest gap with men earning 62 percent more, and Generation Z has a 53 percent difference.
The gender pay gap is likely contributing to that huge disparity, with research published last month by KPMG, the Diversity Council of Australia (DCA) and the Workplace Gender Equality Agency (WGEA) showing found that Australia’s pay gap is estimated at $966 million per week or $51.8 billion per year.
And, while ABS recently reported that the Australian full-time median salary was $90,917 a year, for men that average became $96,018 and for women $82,742.
Ms. Megginson reiterates that the underlying problem is not that “women are not as talented or interested in money as men”, but rather it is a cultural problem that begins in childhood.
“There are some things at stake here, starting with the fact that women and girls are not as exposed to discussions about money and finances,” she said. “This is a recurring theme in all stages of life, starting when they are children.
“Finder data shows that boys receive more pocket money ($10.30) on average than girls ($9.30). This is a weekly difference of $1 per week, or $52 per year, between the genders.
“So this is something that is deeply rooted in traditional gender roles and the expectations that come with those roles.”
That disparity only gets worse once people enter the workforce, where access to financial education and thus lack of confidence with money continues, not to mention pay inequality and maternity leave.
“These things are compounded by the fact that women are more likely to work in care industries, where average wages are lower,” said Ms Megginson.
“Studies have shown that men are more likely to talk openly with each other about money and have ongoing group chats about their investments, their salary negotiations, their cryptocurrency investments, etc.
“Bottom line: The more we can educate and inspire women to be actively involved in their finances and empowered to make decisions about their financial future, the better.”
Breaking it down by generation
In a well-documented struggle for low-income people, who tend to be from younger generations early in their careers, households earning more than $100,000 per year have about three times as much money saved as households earning less than $50,000.
Not surprisingly, on average, Baby Boomers have the most savings, at $76,785 as of August 2022. Generation X follows with $40,484. Gen Y has about half of that with an average of $23,640 in the bank, and Gen Z has just $13,179.
Our cost of living crisis is bound to hit everyone hard, but Generation Y and Generation Z are likely to find it harder, with little savings to fall back on.
How much do Australians need to earn to feel rich?
Despite these findings, Australians have quite a different perception of what kind of salary would make them ‘rich’.
According to Finder research, the average person would only be considered well off if they earned a staggering $326,900 per year.
In particular, Generation Z aspires to a salary of $286,964 per year to feel financially comfortable.