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The power of savings is instilled in us from a very young age. The $2 you got from the tooth fairy or the $5 from mowing the lawn could buy you plenty of sweets at the milk bar,but you’d need to be patient if you wanted to afford that big ticket item. For me,that was a pair of those shoes with flip-out roller skates built into the sole,but for other kids,it was probably something cool like aPlayStation 2.
A savings account is not necessarily the best place to keep your hard-earned.Aresna Villanueva
While schools did a decent job of teaching us about the power of compound interest and the like,our learning stopped around there. This is probably sufficient knowledge for a child who could struggle to imagine things more expensive than a $200 pair of fancy roller skates,but as adults,it’s left us wanting.
What’s the problem?
In Greta Gerwig’s recent cinematic masterpieceBarbie,there’s a joke where one of the Barbies says she “just keeps all her money in a savings account”,much to the dismay of Finance Bro Ken.,this throwaway gag has cut a bit too close to home for some moviegoers,prompting some reflection about what you should do with your hard-earnedother than just keeping it in a savings account (and losing money due to inflation).
On average,Australians have $34,000 in savings,though this varies wildly by age and is heavily weighted to older Australians,with younger generations more likely to have about $10,000,or less. Often,those savings are earmarked for something,such as a new car or a house deposit,but regardless,there’s a good chance you could be making better use of the money you’ve got sitting in the bank.
What you can do about it
To answer this question,I turned to some ofThe Age andThe Sydney Morning Herald’s eminent Money experts to get their advice:
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.