Feeling the pinch of financial stress? Industry super fund-owned bank ME identifies some of the top financial concerns facing Australian households – and what you can do to beat them in 2019.
Slow wage growth
If your pay packet hasn’t changed much in recent years, you’re not alone. The Australian Bureau of Statistics says wages climbed just 2.2% over the past year1, yet there may be a solution.
Handy tip: A study by ME found that one of the most successful ways to boost your income is to negotiate a pay rise with your employer. According to ME, only 12% of workers take this step but with a 75% success rate, it’s worth a shot.
Another possible solution is to invest in a union membership and reap the benefits of collective bargaining. A study released in 2017 by the International Monetary Fund (IMF)2 revealed a positive link between union membership rates and rising employee income.
Low personal savings
According to ME’s latest Household Financial Comfort Report, around a quarter of households have less than $1,000 in cash savings, and it’s leaving these Australians vulnerable to unexpected bills.
Handy tip: Take a fresh approach by putting your savings on auto-pilot. Set up a regular automatic transfer of funds from your everyday account into a savings account – even small deposits can grow into a substantial honeypot over time.
Rising power bill costs
Power bills are rising, with a report from the Grattan Institute3 saying energy bills increased by up to 20% in 2017 alone.
Handy tip: Take the stress out of your utility bills by checking whether you could get a better deal with a different provider or a new energy plan – the savings could add up to hundreds of dollars each year4. Websites like the free government website, EnergyMadeEasy, are a useful starting point to find a cheaper provider or plan.
Higher fuel prices
Motorists are feeling pain at the bowser, with the Australian Competition and Consumer Commission (ACCC) saying petrol prices have hit a four-year high5. This makes it important to look at ways to save.
Handy tip: Consider selling that second car, think about carpooling, or fuel up on days when petrol prices are lower by using the wide range of free fuel price apps and websites to shop around for savings. A ME survey of 1,000 car owners revealed that Australians’ love of buying new cars is costing them tens of thousands of dollars.
Getting on to the property ladder
Rising home prices over the last two decades have made it challenging for first home buyers to get into the market. But the combination of cooler markets, notably in Sydney and Melbourne, together with low interest rates is giving first home buyers a valuable opportunity to take that first step on the property ladder.
Handy tip: The key can be to think outside the square. A 20% deposit may not be necessary, if you’re willing to pay lenders mortgage insurance. Alternatively, consider buying with friends or family, purchasing in a less preferred area or purchasing a smaller-than-preferred property to get a foothold in the market.
Taking some simple steps today can see you beat financial stress and enjoy a smooth sailing 2019.
1 Wage Price Index, Australia, Sep 2018. http://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0/ Accessed 17 January 2019.
2 World Economic Outlook, April 2017: Gaining Momentum? https://www.imf.org/en/Publications/WEO/Issues/2017/04/04/world-economic-outlook-april-2017 Accessed 17 January 2019.
3 Mostly working: Australia’s wholesale electricity market https://grattan.edu.au/report/mostly-working/?_sm_au_=iVVFNPW0WlkNBFQV. Accessed 17 January 2019.
4 Five reasons to use Energy Made Easy. https://www.energymadeeasy.gov.au/five-reasons-use-energy-made-easy. accessed 17 January 2019.
5 Petrol prices hit four-year high in Australia’s largest cities. https://www.accc.gov.au/media-release/petrol-prices-hit-four-year-high-in-australia%E2%80%99s-largest-cities. Accessed 17 January 2019.
This article is brought to you by ME. For more information, please visit www.mebank.com.au.
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