While Australians are saving more, almost half of the working population only have one months' savings or less in the bank to tide them over if something goes wrong.
The latest RaboDirect National Savings and Debt Barometer surveyed 2355 Australians aged between 18 and 65 and presents a worrying picture for the nation's well-being.
The survey found one in five respondents had no savings at all, 13 per cent had less than two weeks' income set aside, and another 13 per cent had less than one month. Stress is on an upwards trend, with more consumers saying they need to budget and watch their spending (29 per cent, up from 25 per cent in 2011) and 10 per cent saying they feel they are always in the red, up from 8 per cent last year.
It's never too late to start a regular savings plan. Photo: istock
While the ideal level of savings depends on how much debt you're carrying and what other sources of cash you can access quickly, many financial planners regard three months' emergency kitty as a rule of thumb.
The executive general manager of RaboDirect Australia and New Zealand, Greg McAweeney, says having a regular and realistic savings plan, even if you are just putting aside $5 a week, has potential benefits for your health and happiness as well as providing a buffer if the unexpected happens.
McAweeney says the survey found savers had higher levels of happiness and health, felt more comfortable with their finances and felt they had greater control over their financial destiny than those who did not save.
''It's never too late to start a regular savings plan and there's no better habit to develop,'' he says.
''Take the first step by moving excess money from your transaction account into a high-interest savings account.
''Look for simple products that you understand and put a plan together that will help you to reach your financial goals sooner, such as true-to-label high-interest savings accounts that don't charge fees.''
Canstar financial analyst Adam Beu says it's a good idea to open a savings account with a different institution than the one where you keep your day-to-day money. ''If it's with the same institution, it's easy to give in to weakness and transfer money to your account and spend it,'' he says. ''You're less tempted if the transfer isn't immediate and may take two days, though the money is still there if you need it.''
Beu says the best way to guarantee you'll save is to set up an automatic transfer when you get paid, so that you don't actually see the money. As you get pay rises, increase that amount and as you adjust your spending your savings should creep up by a few dollars.
He says online savings accounts are often the best choice for emergency savings as they have competitive interest rates, you can start with a low deposit and your money is accessible if you need it. Bonus saver accounts are another option, especially if you are trying to build your savings.
He says you can generally open them with just $20 or $50 and they have built-in incentives to save as well as competitive rates. You may, for example, be required to save a minimum amount each month, or receive a higher interest rate if you add to your savings.