Aussie mum's $1,000 savings confession exposes cost-of-living crisis facing millions

An Aussie mum has shared she only has $1,000 in emergency savings to fall back on as the rising cost of living puts pressure on her household budget. Skyrocketing costs mean the ability to save for a rainy day, let alone retirement, is becoming harder and harder for many Aussies.

Single mum and business owner Leah Selfe told Yahoo Finance she hasn’t had a savings account in 10 years. The Gold Coast mum said rent, groceries and school costs for her 15-year-old son, Charlie, were the biggest pressures on her budget right now and left her with little wriggle room to stash cash for later down the track.

“Those are the biggest ones that I would say I have noticed have been the most stressful,” Selfe said.

“We’ve been living on the Gold Coast for close to nine years this year. In that nine years, what I paid in rent back then to what I pay now has doubled easily.

“With groceries, I find that I go to the shops and I come home with fewer and fewer bags and fewer and fewer items, which can sometimes be extremely depressing.”

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Selfe, an online business manager, said the reality was her family needed money at hand to pay for things now.

“That money is currently being used to pay for things [such as] when my son needs new clothes or school clothes … or even just to get household items when things break around the house, I need to know that I can pull that money and use it,” the 36-year-old said.

“So I haven’t had a savings account in a very long time … [My emergency savings] sit in a business account so if I ever need to it's there.

“At any given time, I wouldn't say there would be more than $1,000 in there so it has to be a small emergency, a big emergency would not be able to be covered.”

While Selfe said she wasn’t struggling to keep on top of her current costs, she said she was “acutely aware” of how much money was coming in and out.

“It definitely plays on my mind more than I would like it to. I’m checking my bank account because I’m just praying that a random bill hasn’t decided to come out, or if I need to get something fixed or replaced, I can potentially have the money sitting there,” she said.

Do you have a cost of living story to share? Contact tamika.seeto@yahooinc.com

Cost of living making it harder to save

New research from Real Insurance found a third of Aussies (31 per cent) were unable to save any money on a monthly basis.

About 45 per cent said they were experiencing “considerable” or “extreme” struggles achieving their savings goals, including contributions to superannuation or investments.

Separate Finder research found 40 per cent of Aussies had less than $1,000 in their savings account. Women were more likely to have less than $1,000 in savings (48 per cent), compared to men (32 per cent).

Finder personal finance expert Sarah Megginson said many Aussies' 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.”

Retirement worries: 'Don't want to be a burden'

Selfe said saving for retirement had also become more difficult. She shared she hadn't paid herself superannuation for at least two years and worried whether she would have enough money to retire in the future.

“I don’t want to be a burden to my son. I want him to be able to live his life and not worry about having to take care of his mum,” she told Yahoo Finance.

“As I’m getting older, it’s definitely something that is becoming more of a stress and I’m very conscious that the longer I leave it, the worse it potentially will get.

“It’s a catch 22 of I want to put money aside and I want to safeguard my retirement but at the same time that money needs to be spent in order for us to have the life that we need, it’s not even having the life that we want, it’s being able to have the life that we need to get by.”

Selfe shared she was working more hours and had taken on more clients to try and boost her income. But she said the downside of this was it dug into the time she could spend with her son.

“I feel like if I don’t try to capitalise on as many hours as I can, I’m essentially going to be stagnant or fall behind,” she said.

Selfe said she had made an effort to cut back on expenses, including being more mindful with her family’s grocery shop, doing meal prepping and having “uncomfortable and hard conversations” with her son.

“Depending on after school activities that he has wanted to do, I’ve had to look at my budget and say ‘We can do that, but if we do that, we can't have this or we can’t go and do this as often’,” she said.

Aussies urged to build up emergency funds

Megginson said planning for the unexpected, where possible, was crucial.

“An emergency fund can be a crucial financial safety net to help you navigate life’s unexpected turns," she said.

She recommended saving at least three months' worth of expenses for emergencies.

To help build up your emergency fund, Megginson recommended people review their current expenses, increase their income if possible, and park any spare cash in a high-interest savings account.

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