Do you feel rich?
Well, the average Aussie says they’d need to earn a significant amount of money to feel rich, according to new research.
A recent Finder’s survey revealed the average Australian wouldn’t consider themselves affluent until they were earning $345,819 per year.
That’s almost 5 times greater than the average personal income of $72,753, according to the Australian Bureau of Statistics.
Rebecca Pike, money expert at Finder, said longing for more cash can be a dangerous game.
“Remember only a small percentage of the population earns anywhere near $346K – the typical Aussie is on a salary closer to $70,000.
“That said, it’s been an incredibly tough couple of years for many, with household budgets pushed to the limit.
“With everything from soaring property prices to expensive energy bills, the average person now feels they need to earn a whole lot more to be wealthy.”
Millennials need the most money to feel rich ($418,325), followed by gen Z at $392,077.
Baby boomers think you need to earn the least amount to be wealthy ($273,812), compared to $307,257 for gen X.
The average Australian has $37,975 in savings and saves an extra $705 each month, according to data from Finder’s Consumer Sentiment Tracker.
Pike encouraged Australians to get savvy with their finances.
“If you feel like your pay isn’t stretching far enough, take stock of where your money is going.
“Cut spending on anything you aren’t using or no longer need, and don’t pay too much for what you do need.
“From energy to insurance to your mobile provider, compare your options to ensure you’re getting the best bang for your buck. If you haven’t switched any of these in the past 6-12 months, you’re probably paying too much.
“Work on habits like setting aside a regular portion of your income straight into a high interest savings account and let it grow,” Pike said.
| How much do you need to earn per year to be rich? Gen Z $392,077 Millennials $418,325 Gen X $307,257 Baby boomers $273,812 Average Australian $345,819 Source: Finder survey of 1,032 respondents, November 2023 |
Finder suggests some ways to build your wealth in 2024:
- Don’t pay for what you don’t need or aren’t using.
Don’t waste money on gym memberships or streaming subscriptions you rarely use. You can easily join back up again if you find a show or movie you want to watch. Sharing subscriptions can be a great way to save some cash. - Don’t pay too much for what you do need.
We’re creatures of habit. We end up thinking, “I’ve got to pay for power,” but we just stick with the same power company. Loyalty doesn’t pay when it comes to financial products. It’s always worth comparing and shopping around for a better deal. - Track your expenses.
Take a look at your transactions for the last few months and what you’re spending on living expenses versus everything else. From here, you should be able to find opportunities to cut back on your spending and work out how much you can realistically save each month. - Use your existing savings to grow your wealth.
Don’t just let it sit there. A new ACCC report found 71% of bonus interest accounts did not receive any bonus through the first 6 months of the year. If this is you, make sure you are meeting the criteria. If you don’t know, check out the best high interest savings accounts and earn bonus interest on your balance when you meet the account conditions each month.
We are here to offer guidance to help you achieve your financial and life goals. Reach out to us by calling 08 82314709 or at info@centrawealth.com.au.
Article courtesy of Michael Yardney’s Property Update.
