Millions of Australians have seen their savings derailed by unexpected financial emergencies in the past 12 months, new research suggests.
A Finder survey found 18 per cent of respondents said they’d taken an emergency financial hit in the past year – equivalent to 3.8 million people.
The average monetary cost was $5130 per person, or a projected $19 billion nationwide.
And with Finder’s data showing 40 per cent of Australians have less than $1000 in savings, a sudden $5000 bill can cause financial carnage.
Finder personal finance expert Sarah Megginson said emergency funds were in bad shape.
“It’s been a very tough year for Australians, with many households exhausting their funds as they struggle to deal with the higher cost of living,” she said.
“Financial emergencies are more common than people realise, and often require households to resort to extreme levels of sacrifice or going into debt to manage.”
Finder’s research found women (21 per cent) are more likely than men (15 per cent) to have endured an unexpected expense.
And it’s more costly for women too, at $6428 on average – almost double the $3387 average for men.
Megginson said in the context of the cost of living crisis, it was more important than ever to have a budget.
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“If you are worried about your upcoming payments, reach out to your lender or provider to find out about their support and resources,” she said.
Megginson recommended saving at least three months’ worth of expenses in case of emergencies.
“Finding a side hustle can help supplement your emergency savings, but it’s also really effective to review your current spending habits and household bills to look for opportunities to pay less or spend less,” she said.
“Park any spare cash in a high-interest savings account to help build your buffer faster.”