Savings take priority in 2013
Australians plan to build a savings buffer in 2013 as mortgage repayments take a back seat, according to the ING DIRECT Financial Wellbeing Index.
"Australians have focused on debt reduction for much of 2012, and while this remains a priority a growing number of households are now turning to savings," ING DIRECT executive director, customer, John Arnott said.
About one third of Australians are aiming to build savings, with the figure rising to 39 per cent of Gen Y's.
Just over half of those saving are trying to build a financial buffer of, on average, at least three months worth of wages (approximately $15,200).
"A target of $15,200 is a lot of money, but it represents three months of average income and to have that sort of buffer in cash savings is a good thing for peace of mind," Arnott said.
The main aim for 37 per cent of Australians (46 per cent among Gen X households) was paying down debt or avoiding accruing more debt.
One in five said they were now in a better position to save more, while 18 per cent said paying down debt had put them in a position to increase savings in 2013.
One in 10 said the global financial crisis was a wake-up call, and 16 per cent were squirreling their cash away due to job security.
Households planned to save in a variety of ways. The majority (41 per cent) said stricter budgeting would improve their savings balance, while 39 per cent said they would cut discretionary spending.
Almost 30 per cent said they planned to begin saving regularly, while 15 per cent said they would rein in their holiday budget.
Almost all Australians (93 per cent) were comfortable with their mortgages, with 64 per cent very comfortable and almost half ahead on their mortgage repayments.
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