People quite naturally tend to live within their means. Low-income earners may scrape and save to put together enough money for the down-payment on a house, and those with higher wages will go for bigger abodes with larger home loans.
A huge 43 per cent of us can't put any money aside at all.
Because of this, many people struggle to save money – we spend more when we earn more – and it affects their financial stability. In fact, the Australian Securities and Investment Commission (ASIC) found that a huge 43 per cent of us can't put any money aside at all, while 41 per cent are able to save a little.
Only 16 per cent of us find saving easy, which is no doubt an obvious minority. Your ability to squirrel away money for a rainy day comes down to your spending habits, but also your saving ones. Whether you're saving for a new car, a holiday or a new addition to your family, understanding the latter makes a big difference.
ASIC also says there are four types of savers. So, which one are you, and how can you become a super saver, rather than a sloppy one?
1) The steady saver
Around one-third (37 per cent) of Australians would say: "I save small amounts regularly and I'll eventually get there," ASIC's research found – going up to 39 per cent in women. They may put aside a set amount from their paychecks, or bank whatever's left after they've bought all the essentials.
They are likely to have a budget, and will stick to it for the most part. However, they do not generally set a timeframe on when they will have enough money. If you're saving up for a holiday, you'll want a deadline in place to help.
So, if this is you, while you're definitely on the right tracks, try setting a savings target for the near future, and monitor your progress along the way.
2) The powerhouse
Like a bull in a China shop, 28 per cent of us will say "I'm really focused on saving as quickly as possible" – for men, this is a whopping 36 per cent. Once they have a goal in their sights, they'll drop almost everything to reach their target.
That's great, but it can lead to irregular spending behaviour, particularly if things don't go your way. For instance, if your variable home loan repayments spike, you may be limited in how intensely you can save.
Instead of the all-or-nothing approach, try to take a longer-term stab at budgeting. You'll likely find more money in your savings account when you need it, rather than having to intensely put cash aside once in a while.
3) The non-committer
Nearly one-quarter (24 per cent) of Aussies have a plan to reach their financial goals, but tend to stray from the track often. It might be the odd splurge in the shopping centre, or buying a new car; these people are too tempted to treat themselves.
And why not? You can't save all your money for retirement. These types of things can be worked into your budget plan, though, so you don't have to abandon your financial goals altogether.
It's like getting fit: plan for a treat day and then get right back onto your plan, instead of breaking your regime completely and ruining your confidence in your ability to meet that goal.
4) The dreamer
If anyone's in need of a budget planner, its Australia's dreamers. A substantial 11 per cent of us say "I have savings goals, but no real plan for achieving them," ASIC discovered.
It's something we similarly see with superannuation, with a third of Australians shunning advice and Roy Morgan finding that nearly 30.3 per cent of the population considers retirement too far away to plan for.
If a dreamer wishes to improve their financial stability, budget planning isn't that hard. If you need a little help getting started, have a play with CAPE's savings calculators and see your money-saving potential.
