How do your savings and investments compare to your peers?


Jason Prowd  |  28 May 2018  |  8 min read

Key points:
  • Knowing how your finances compare to the average Aussie household can help you get on track and set realistic financial goals.
  • It’s possible to save money to invest at every stage of life.
  • Increasing your investments can be a great way to improve your future life.

Humans are hyper-comparers. Especially when it comes to money. How much are our mates spending and saving? How and where are they investing? These questions fill our minds, though we never speak about it. It’s a shame because knowing your position relative to others can be a great way to assess your financial position and get motivated to grow your wealth.

Given your friends are unlikely to start divulging their financial profile anytime soon, we’ve put together some data you can use. We’ve combed through recent Australian Bureau of Statistics (ABS) household data to find out where other Aussies find themselves financially. Their income. Their spending. How much they’ve got saved. How much they’ve invested and where.

Oh and something to point out – ABS data is based on households, not individuals, so use your approximate household finances to compare.

Let’s get into some high-level benchmarking. We’ve broken the data up into four major career phases:

  1. Early Career (25-34 years old)
  2. Mid-Career (35-54 years old)
  3. Pre-Retirement (55-64 years old)
  4. Retirement (65+ years old)

If you’ve got your financials handy you can compare them with those of your peers in the table below. You’ll notice the data includes the ‘net worth’ of households – this is simply a household’s total assets (what you own) minus their debts (what you owe).

The figures below are averages rather than medians. Ideally, we’d use medians—which aren’t skewed by a few super wealthy/lucky folks in each group, but sadly we couldn’t find the data. All things being equal the medians would be lower for each group.

 

Table 1: Average household finances by career stage

Average Household Financials Early Career: 25-34 years Mid-Career: 35-54 years Pre-Retirement: 55-64 years Retirement: 65+ years
Weekly disposable income (after tax) $1,734 $2,057 $1,825 $1,063
Weekly expenditure $1,478  $1,486  $1,468 $886
Potential weekly savings* $256 $571  $357  $177
Net worth  $317,900  $903,800  $1,308,00  $1,213,000
Financial Asset Value (TOTAL)  $133,500  $391,000  $544,200  $438,400
Bank savings accounts  $21,800  $39,400  $66,400  $78,800
Bank offset accounts $13,400 $13,800 $8,800 $1,300
Shares $6,600 $23,400 $29,700 $40,300
Superannuation $63,100 $169,400 $326,700 $222,100
Non-Financial Asset Value (TOTAL)  $381,700  $762,450  $906,000  $841,800
Property $320,300 $657,000 $791,200 $745,300
Home contents $40,100 $76,100 $84,600 $76,600
Vehicles $21,300 $28,100 $30,000 $18,100

Note: Calculated from ABS data1, to be used as a general indication. Ages are based on the age of the main survey respondent in the relevant ABS survey. Averages are based on mean data. Data on 35-54-year cohort calculated from data on 35-44 and 45-54 years cohorts combined. The sub-items of ‘Financial Asset Value’ and ‘Non-Financial Asset Value’ don’t add up to the total as we haven’t included every type of asset in the list.

 

But what if you don’t fit the average profile? Within each career phase, there are different numbers depending on your household type. We’ve compared a few different households to give you an idea of how things can vary.

 

Early Career: 25-34 years old

You’re starting out, saving for your future. Perhaps you’re saving for your first property or you’ve recently bought a home. You’ve made a start with super and you might have made some investments. But what about kids? Data shows that kids have a big impact on your financial picture.

If you’re one of the affectionately called DINKs (double income, no kids), you’ll likely have a higher income than the group in general. In theory, you should be able to save more (up to $500 a week more) and while it doesn’t immediately translate to a higher net worth, it will over the long term.

 

Average Household Financials Early Career: 25-34 years Double income, no kids (<35)
Weekly disposable income $1,734 $2,372
Weekly expenditure $1,478 $1,584
Potential savings* $256 $788
Net worth $317,900 $285,700
Financial Asset Value (TOTAL) $133,500 $134,000
Non-Financial Asset Value (TOTAL) $381,700 $358,300

 

Mid-Career: 35-54 years old

You’ve been in the workforce for some time. You’ve been working hard to pay off your mortgage and invest for retirement. But what if you’re a single mum or dad?

For these households, you’ll find yourself with less income but not necessarily lower expenses. After all, you still have to pay for your home, food and kids’ education, just on a lower income than the general group. The amount you could potentially save each week is less. But remember, small amounts can grow into a solid investment over the long term. Every bit adds up.

 

Average Household Financials Mid-Career: 35-54 years Single parent 35-54 years,

with dependent kids:

Weekly disposable income $2,057 $1,231
Weekly expenditure $1,486 $1,183
Potential weekly savings* $571 $48
Net worth $903,800 $349,000
Financial Asset Value (TOTAL) $391,000 $125,600
Non-Financial Asset Value (TOTAL) $762,450 $328,200

Pre-Retirement: 55-64 years old

Pre-retirement is usually when your financial net worth peaks. After decades of working you’re now trying to add extra to your retirement funds which you’ll start to draw on in the next decade. It comes as no surprise that pre-retirees who still have adult kids at home typically have less in financial assets.

 

Average Household Financials Pre-Retirement: 55-64 years Couple with adult kids at home Couple only
Weekly disposable income $1,825 $2,571 $2,038
Weekly expenditure $1,468 $1,848 $1,414
Potential weekly savings* $357 $723 $624
Net worth $1,308,00 $1,496,800 $1,520,600
Financial Asset Value (TOTAL) $544,200 $601,600 $677,200
Non-Financial Asset Value (TOTAL) $906,000 $1,090,500 $1,000,900

Note: We assumed that the primary age group for the couple with adult (non-dependent) kids at home is 55-64. Empty nesters are a couple-only household.

 

Retirement: 65+

No longer in your saving phase, you’re hopefully enjoying a well-deserved time in your life. For many of us, the goal is to stick to your drawdown plan to make sure your money lasts.

If you’re able to save a little from your retirement income, your funds will last even longer. Same goes for people who are single.

 

Average Household Financials Retirement: 65+years Couple Single person
Weekly disposable income $1,063 $1,237 $617
Weekly expenditure $886 $1,074 $536
Potential weekly savings* $177 $163 $81
Net worth $1,213,000 $1,627,500 $749,200
Financial Asset Value (TOTAL) $438,400 $671,200 $194,000
Non-Financial Asset Value (TOTAL) $841,800 $1,077,200 $441,900

Start small, start today

I hope this data has given you a good idea of how your household’s finances compare to that of others like you. If you’re ahead – awesome. If you’re not on track yet, consider how you could increase your income or trim your expenses to save more. In Am I ready to invest? and Why do I need to invest? we offers a few ideas to help get you started.

Never had a chat to your mates or family about money? Why not start today? Be open, honest, and humble. Do it over a bottle of wine. You never know what you’ll learn. More likely than not, you’ll discover you’re all facing the same issues and find some creative ways to tackle them.

Whatever stage you’re at, the smallest of changes can make a really big difference to your future.

resources
  1. Australian Bureau of Statistics, Household Expenditure Survey, 2015–16. Released September 2017.
  2. Australian Bureau of Statistics, Household Income and Wealth, Australia, 2015–16. Released October 2017
author

Jason Prowd leads Morningstar Next: ready-made investment portfolios.


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