Households are being forced to dip into their nest eggs and even their kid’s savings to put a roof over their heads.
According to Finder, 50 per cent of Australians have withdrawn money from savings in the past 12 months, while more than 892,000 parents have used the money they set aside for their children on something else.
On average Australians have withdrawn $2,365 from savings in the past 12 months, which equates to $47 billion nationwide.
Mortgage and rental payments ($367), everyday essentials ($327) and unforeseen emergencies such as medical costs ($185) were the main cost that people needed to dip into their savings for, along with debt repayments ($149) and school fees ($29).
At the same time, 16 per cent of Aussie parents put their kid’s savings towards general expenses, while 1 in 10 (11 per cent) used their kids’ future savings buffer to pay off debt.
The same proportion (11 per cent) dipped into their kids’ funds to buy themselves a home, while 9 per cent used it to pay for a renovation.
Money expert at Finder, Alison Banney, said a growing number of families are living paycheque to paycheque.
“Aussies are doing it tough with many unable to cover rising costs from their income alone,” Ms Banney said.
“Millions of people are in pretty bad financial shape at the moment and pressure continues to build.”
Finder’s data also found that women spent more of their savings over the past year than men – with women withdrawing $2,524 on average, compared to $2,199 for men.
While Gen Z are more likely to have tapped into their kids’ savings, with 41 per cent admitting to taking from money set aside, compared to 28 per cent of baby boomers.
The research shows almost 1 in 5 (18 per cent) parents don’t have any savings set aside for their kids.
According to Ms Banney, parents are struggling and needed to make tough choices.
“This isn’t an easy decision to make, but when faced with the reality of not being able to pay bills or put food on the table, the choice is clear,” she said.
Ms Banney said Australians should do a thorough audit of their lifestyle to cut costs.
“From refinancing a loan for a lower interest rate to getting a better deal on your mobile phone plan there are a lot of quick wins hiding in plain sight,” she said.
“Budgeting is also important to see where your money is going to make sure there isn’t any wastage.
“There’s a ceiling for how much you can cut from your life – but the sky’s the limit when it comes to how much we can earn.”
