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

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.

• Also read: 77 per cent of Aussies eye side hustle to make ends meet

• Also read: Shocking image shows cost of living set to skyrocket

• Also read: What people are ditching as the cost of living soars

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.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.