Australians don’t have a reputation of being frugal. Fortunately, they are not extravagant either. However, the recent data from Australian Bureau of Statistics on Australian household savings forces us to advise them to save more.
Personal saving was 10.60% in the third quarter of 2013. It dropped to 9.70% in the fourth quarter. The averaged personal saving has always been 10.73 with an exception of 1973 when it surged to 21.60%.
The importance of household saving is mammoth. In Australia, household savings accords with saved household income and household net disposable income ratio. Australians have been found to save most of their disposable incomes in recent years than previous decades. Experts believe this is a good trend as relentless buying translates to relentless borrowing. Moderation in the borrowing habit of the household sector is prominent in Australia, which is again a good sign.
Question is how this trend could be retained. Australians need to follow money savings tips. One of them is to rely on interest rates on fixed deposits. Due to increase in household savings, Australian banks have moved to a more credible funding pattern. Earlier, banks relied on short-term wholesale funding which resulted in difficulties. But now, as the overall household savings has increased, banks looked at long-term wholesale funding. As long-term deposits are being given paramount importance by banks, consumers could expect high return on deposits.
To save money, Australians need to check the interest rates on credit cards and personal loans. If the rate is high enough to bug you, you could opt for balance transfer. The advantage of balance transfer is lower than normal interest rate for transferring customers which in turn reduces the monthly outflow of money.
You could take similar steps that are simple yet effective. Checking the direct debit every once in a while could be helpful because we sometimes pay money unknowingly for things that we haven’t purchased. If you identify any such loophole contact your bank immediately.
Saving is necessary for retirees. To keep your funding stable after retirement, check the superannuation on a regular basis to make sure that your employer is making 9.25% compulsory payment. Another helpful way is to consolidate the superannuation account by merging other accounts to it. This will help you to reduce expenses as you might be paying sizable fee to maintain multiple accounts.
By following the aforementioned tips, you could cut spending and save money. This in turn would bolster the economy.