Saving might feel impossible, but there are five reasons to try

Saving might feel impossible, but there are five reasons to keep trying Tue 16 Jun 2026 at 5:00am Once upon a time, saving was a sensible pathway to financial security. You put your hard-earned cash in the bank. Those savings grew, helped you buy a home and you could put anything extra aside for retirement. Those days are gone. Inflation has outstripped interest earned over the past decade, and the cost of living has skyrocketed, making it hard to make ends meet, let alone have any money left over. Don't even get me started on housing affordability. With all that happening, saving might feel unachievable. Previously, I've explained how you can save cash (while still having a life) and whether it's better to pay extra money into your mortgage, super or other investments. These are part of a bigger, more complicated picture than earlier generations had to navigate. Saving is not the only tool you need to achieve financial security these days, but it still has a role to play. If you can manage it, cash in the bank can do five good things for you. A buffer - any amount will help Cash in savings is like a cushion to land on when life trips you up. It prevents you turning to debt to cover a period of unemployment or your car breaking down, for example. Think of it as your buffer between life's hiccups and the resulting stress those hiccups create. With more general uncertainty in the world, you might find you want a bit more socked away than usual to achieve worry-free sleep. Adjust how much you aim to have in your buffer fund accordingly. If sleeping well isn't on the agenda for you right now — for example, if you're already in financial stress with no buffer — please get in touch with one of Australia's heroes: a financial counsellor via the National Debt Helpline. Don't be fooled by the site's name. Financial counsellors aren't just for debt. They're free and available for all Australians, and they can help you get through tough times when there's no money spare. Once you're through that period, you might have some space to think about building a buffer fund. Buying a home - start small now for the future If you fancy owning a home one day, you're likely to need a deposit. Most people won't be able to get a mortgage without at least some savings set aside, in the bank and or through the First Home Super Saver Scheme if eligible. You can get a 95 per cent loan, but even a 5 per cent deposit is a decent chunk of change. As unlikely as it seems, at some point in the future house prices may become more affordable. When that happens, anyone with a deposit saved will be first in line to get a better deal. You have to save before the better prices arrive if you want to be first in line. Investing - alternatives to buying a house Buying assets such as bonds or shares can help you build wealth and therefore security. Using saved cash to buy them instead of debt is one way to keep your risk profile lower. For example, if you lose money selling shares you bought with cash, you lose some cash. If you bought them with a margin loan, you might have debt with accumulating interest to repay even after you sell the shares. Knowing when you can spend With a major caveat: if you set up a solid saving system first. You can automate saving so you don't need discipline or habits to do it consistently. Set up a system with an ambitious saving rate to automatically set aside the cash first, then spend what's left over on what you want with peace of mind because you've already done your saving. You may be able to automate through your employer's payroll system, for example by asking payroll to split your salary across two accounts — one for saving, one for spending. If you're paid irregularly or if you simply prefer it, you can use scheduled bank transfers to move the money to a dedicated account after the money comes in. Protection for you Cash in the bank can come with something similar to insurance in Australia. Specifically, having your cash in an account covered by the Financial Claims Scheme (FCS) means your deposit is protected against loss if something goes wrong with the bank. To be eligible for the FCS, your money must be with an authorised deposit-taking institution, or ADI, also known as licensed banks and credit unions. Under current rules, you're covered for up to $250,000 per person, per ADI. And remember If you can't save right now, please don't be hard on yourself. You are not alone. With many home-owners in mortgage stress and about one in seven Australians on or below the poverty line, saving might feel out of reach. Again, please consider chatting with a financial counsellor. They may be able to help get you on the path to a future where saving becomes possible. Lacey Filipich is a financial educator and the author of Money School. This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.