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Rising cost of living doesn’t mean you should stop saving

·Personal Finance Editor
·2-min read
Australia currency and people walking on a busy street to represent the rising cost of living.
As the cost of living grows ever higher, Aussies have started neglecting their savings. (Source: Getty)

With the cost of living rising, our everyday expenses are getting higher so there is less money to put aside for our savings.

In fact, the new personal finance survey by Savvy found that a quarter of Aussies said they saved less than $250 a month, with 19 per cent saying they didn’t manage to put anything aside at all.

It’s not all bad news though, with 32.5 per cent of Aussies managing to save $750 or more every month.

According to the findings, 78 per cent of Aussies rely on savings accounts to put money aside for the future, followed by super contributions (24 per cent) and stocks and shares (19 per cent).

When it comes to returns on savings and investments, compared to rising prices, 43 per cent of Australians are “not confident” that their investment returns will continue to outpace inflation in the near future.

Savvy’s money expert, Bill Tsouvalas, said that even in times of rising prices, paying yourself first and putting money aside was as important as ever.

“Though everything seems to be getting more expensive, now isn’t the time to stop putting money away for the future,” Tsouvalas said.

“When inflation is high, you should be looking for easy investment options that will protect your savings, like term deposits, savings accounts, shares and managed or indexed funds - all of which can provide a better return on investment and help you save for big-ticket items, such as a house deposit.”

How are Aussies investing their savings?

When given an opportunity to identify all preferred saving and investment vehicles, the vast majority of respondents (782 of a total 1002), used a savings account, the research found.

This figure was slightly higher for females (80 per cent) than males (76 per cent).

The division between sexes was more pronounced when it came to stocks and shares, which were chosen by 23 per cent of males, compared with only 14 per cent of females.

Similarly, more men than women were contributing to their superannuation; 26 per cent vs 21 per cent, respectively.

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