Australia’s savings crisis has been laid bare – and the numbers show a shocking reality about what people really have in the bank. 

According to the Finder’s Consumer Sentiment Tracker for July, the average Australian currently has $47,624 in savings, marking the highest figure since 2019, which is a notable increase from $31,324 reported in 2023.

But the headline numbers mask big generational divides. Baby Boomers (61-79) hold the most, averaging $65,428, followed by Gen X (45–60) at $49,989. 

Millennials (29-44) lag behind at $42,337, and Gen Z (13-28) at $37,617.

Meanwhile, Younger Australians are saving more aggressively each month.

Millennials are saving about $1,286 each month, while Gen Z follows closely, saving around $1,161. In contrast, Gen X saves $807 monthly, and Baby Boomers save just $579.

Yet, financial specialist Sarah Megginson pointed out that these averages might be misleading: 43 percent of Australians have less than $1,000 put aside.

She mentioned that a few individuals with substantial savings can skew the average upward, giving the impression that the average person has more money saved than is actually the case.

‘For example, if three people have $500, $1,000 and $100,000, the average is about $33,833, but clearly that doesn’t reflect the situation of most.’

The average cash savings by each generation shows Gen Z are saving more than ever

Personal finance expert Sarah Megginson warned the averages don’t tell the full story: 43 per cent of Australians have less than $1,000 in savings. 

Ms Megginson stressed that savers shouldn’t be discouraged if they’re not close to the average.

‘There’s no one-size-fits-all answer because it really does depend on your personal situation and lifestyle,’ she said.

Sarah noted that if you have children, a mortgage, or run a business, you might feel more secure with a larger savings cushion than someone with fewer financial obligations.

She suggested it’s generally beneficial to have two savings accounts: one should serve as an emergency fund with enough savings to cover three months’ worth of expenses, such as rent, groceries, and bills, in case of job loss, illness, or an accident.

Ms Megginson recommended a second savings account to save for big goals like buying a car, going on a holiday, buying a home or doing renovations.

‘Those Aussies who are in a position to sock away some money are getting ahead as the average savings balance in Australia has reached a record high of just over $47,000 per person, up from $31,000 in July 2023,’ she said.

‘But those who have been hit hardest by the cost of living crisis, like low-income earners, pensioners and single-income families, are struggling to build their savings.’

Barefoot Investor Scott Pape says Australians should aim to live on just 60 per cent of their take-home pay, so they can put the rest towards savings and future expenses. 

‘I’m talking about the barest of necessities: the roof over your head, food in your belly, utilities, petrol, school fees, and your phone, ‘ he said on his Barefoot Investor website.

‘Depending on your housing costs you may not be able to hit the 60 per cent mark – and that is totally okey dokey. This is not about subscribing to a cookie-cutter percentage but rather about being aware of how much it costs to keep the kids from drinking out of the dog bowl.’

Barefoot Investor Scott Pape says Australians should aim to live on just 60 per cent of their take-home pay, so they can put the rest towards savings and future expenses

He suggests dividing the remaining 40 per cent into three separate accounts – which he refers to as “buckets”.

’10 per cent Splurge: Blow 10 per cent on anything fun – shoes, booze, lattes. Set up an automatic transfer to a separate high-earning savings account. But when it’s gone, it’s gone!

’10 per cent Smile: Save 10 per cent in an online savings account for big goals like a holiday, Invisalign, or a puppy. It’s called the ‘Smile’ account because it makes you smile every time you think of it.

’20 per cent Fire Extinguisher: This bucket is to put out financial fires, like crushing credit card debt, saving up for a house, or getting the banker off your back. Your Fire Extinguisher account will be used for different financial fires at different times in your life. (The 20 per cent amount doesn’t change, but what you use it for will.)’

To save extra cash, Mr Pape urges Australians to start with their mortgage, saying that even a small 0.5 per cent rate cut on a $450,000 loan could save more than $42,000 over 25 years.

‘If your home loan interest rate starts with a “7”, you’re getting robbed … and you need to switch,’ he said.

He called on Aussies to ring their bank and demand a lower rate.

‘When it comes to home loans, it’s still easier to b**** than to switch, but switching could save you $42,622 on a standard mortgage.’

He stresses the need to boost income by asking for at least a pay rise that matches inflation

He also recommends combing through your bank statements to cancel unused subscriptions.

‘Look for some easy payment-pimples to pop: maybe it’s the monthly Netflix sub, or some random app you haven’t used in yonks.’

Other key savings come from reviewing private health cover on the government’s privatehealth.gov.au site, shopping around each year for home and car insurance, and even raising your excess to cut premiums.

‘The difference in home and content policy prices from one insurer to another can be wild.’

He also says to drive the cheapest car your ego allows.

‘Don’t drive a car worth more than your age.’

He stresses the need to boost income by asking for at least a pay rise that matches inflation.

‘Inflation is like being stuck on a treadmill that keeps getting faster and faster – you have no choice but to keep running.’

‘Cut ruthlessly on the things you won’t miss, so you can splurge on the things you love – that’s how you live like a millionaire.’