When is it time to start saving for a rainy day?

Queenslanders were being urged to tuck some extra money away for a rainy day when thinking about their financial New Year’s resolutions and savings plans.

News.com.au reported finance experts recommended having at least three months’ salary saved in the bank, with COVID-19 still creating an uncertain economic climate.

RACQ Bank spokesperson Lucinda Ross said even before the pandemic, many Australians lived pay to pay with very little savings to protect them in the event of unexpected financial stress.   

“Now, more than ever, developing and protecting an emergency fund should be a priority for all of us, so we have a level of financial protection when things don’t go to plan,” Ms Ross said.

"While there isn't a magic number, it's certainly worthwhile taking a look at your savings, and your emergency fund, to make sure you can handle the ups and downs that may come.”

Ms Ross said there were a few simple things everyone could do to help them save.

“It can be difficult to build an emergency fund when you don’t have a clear view of your spending habits,” she said. 

“So, start by sitting down and having an honest look at how much you earn, your expenses and what you’re spending on non-essentials. Cut out any unnecessary expenses, like streaming services or gym memberships you’ve stopped using. 

“For essentials like your phone, electricity and internet, shop around to make sure you’re getting the best deal possible, as these savings can really add up.

“Once you know what you can cut and how much you can save, consider setting up separate bank accounts and an automatic transfer each pay. This removes the temptation to spend more as the money has already been allocated.”

 For more information on managing finances, visit RACQ’s Financial Wellbeing Hub.