We're saving more, but who's left behind?

Australians are saving more than ever, according to the latest ING Direct well-being index, but those aged between 35-49 and those with kids probably aren't putting as much away as others. Picture: ThinkStock Source: Supplied

• Generation X saving the least, well-being index shows
• Victorians saving the most, South Australians the least
• Australians feeling more confident with mortgages

WE'RE saving more than ever and are less worried about debt and our mortgages with the average Australian household managing to triple savings in the past two years.

The latest ING DIRECT Financial Well-being Index has found Australians are not only more confident with their mortgages, but have become better at managing their finances better as well.

And while Australia remains one of the most expensive countries in the world, it seems we're getting better at saving with the average household having around $15,427 in the bank in the first quarter of this year, up more than $5000 compared to two years ago.

Well at least that’s the case for some of us anyway.

If you’re South Australian and aged between 35 and 49 it's more than likely you're not saving as much as some of your countrymen.

According to the index, Gen X (35-49) are saving the least with a median savings bank of $8060 compared to $14,377 for Gen Y (18-34) and $17,744 for baby boomers (50-64).

Raising children could be one of the reasons behind the slower savings rates for Gen X households, with one in three having savings below $1675, compared to 21 per cent of Gen Y households and boomers.

And it seems on a state by state level, Victorians are the best at managing their finances overall with an average savings level of $24,971 per household, followed by Western Australians who have around $19,442 in the bank.

But if you’re living in a South Australian household chances are you’ve only got an average savings stash of around $7998.

The index, which rates household comfort levels across six key aspects of personal financial well-being including credit card and mortgage debt, also reveals 93 per cent of home owners feel comfortable with their mortgages, and 65 per cent are very comfortable.

Almost three quarters of people quizzed, 71 per cent, said they were comfortable with their level of savings.

Executive Director Customer at ING Direct John Arnott said the report indicated that Australian households were growing increasingly confident with saving while paying off the mortgage.

Low interest rates had also helped almost half of those survey, 44 per cent, get ahead on their home loans.

"It is significant that household savings rose during the first quarter of the year as this is traditionally a time when many Australians experience a cash drain following the festive season," Mr Arnott said.

"The continued growth in savings since mid-2011 reflects the commitment of Australians to building a buffer of cash, and it is not surprising that high levels of savings are supporting increased financial confidence among households."

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Saving on credit card fees while overseas

There are several ways to avoid or reduce fees charged to your accounts and cards while accessing money overseas.

OVERSEAS trips can be as fun as they are expensive.

It can be said that some of these costs are avoidable, largely the fees and charges that come with accessing your money whilst overseas.

And whether it’s EFTPOS, ATM withdrawals or at a currency exchange booth, smart travellers can save hundreds, potentially thousands, on fees and charges while abroad.

What you need to know is the fees you can avoid and how to minimise the fees you can’t.

Credit cards

If you use a normal credit card to pay for expenses overseas, you’re going to get a good lesson in fees that you will never hope to repeat.

The main offender is the currency conversion fee.

Also known as a foreign currency conversion fee, foreign transaction fee or cross currency conversion fee, this is charged when a lender converts Australian dollars into a foreign currency to pay for a transaction.

Often the credit card provider will pocket two or three percent of the transaction value for providing the currency exchange facility.

The simplest way to avoid this trap is to use a card which doesn’t have a conversion fee.

Only a handful of cards have this unique feature, such as the GEM 28 Degrees MasterCard, the Bankwest Platinum credit card range and the Aussie Platinum Low Rate Card.

These cards also come with the nifty benefits of complimentary travel insurance - saving you some sweet pennies before you depart.

How you get stung*

- Local ATM operator fee: $2
- International ATM fee: $5
- Cash advance fee: 1.50%
- Cross currency conversion fee: 3%
- Interest charges: 20%

A common sting for consumers is withdrawing cash from an ATM. This triggers a cash advance fee, local ATM operator fee, international ATM fee and interest, charged from the day the withdrawal is made.

Another way to approach this situation is to load a debit balance (or use your debit card).

This approach saves you the interest and cash advance fee. The Aussie Platinum Low Rate Card, for example, allows you to pre-load your card with a debit balance to escape these fees.

Currency exchange rates can’t be locked in, even with a pre-loaded debit balance. The rates will be your providers rates for the currency on the day.

Using a credit card is not the wisest option for the fee-shy traveller. But if you have to, make sure that you know exactly what you’re getting yourself into.

Debit card transaction accounts

While these accounts spare you interest and cash advance fees, there are still a trio of fee nasties to avoid.

Foreign ATM fee, local ATM operator fee and cross currency conversion fee can all still apply with many products.

The Citibank Plus Transaction Account is an account that waives cross currency conversion fees and foreign ATM fees (local ATM operator fees still apply).

How you get stung*

- Foreign ATM fee (charged by your institution): $5
- Local ATM operator fee: $2
- Cross currency conversion fee: 3%

A tip to avoid the local ATM operator charge is to look for your bank’s global partner ATMs. Contact your provider to find out which ATM alliances they have in place.

For example, Westpac have an agreement with Deutsche Bank and Barclay’s Bank for local ATM operator charge free services in countries from the United Kingdom to Zimbabwe.

Choices made before you take a trip abroad will be the biggest factor in how many fees and charges accompany your overseas spending. Planning ahead will save you big dollars in needless fees and charges.

Jeremy Cabral is a publisher for the websites CreditCardFinder.com.au and SavingsAccountFinder.com.au

*These fees are approximate and differ from institution to institution. Please read the terms and conditions of the products featured in this article before you apply to ensure it is suitable to your personal circumstances.

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