Recent findings shed light on the savings habits of Australians, highlighting a significant gap in financial preparedness for emergencies.

An ING study shows that only 22% of adults have saved enough to cover three months of expenses, while a concerning 20% have less than $1,000 set aside.

Savings amounts vary across age groups. Generation Z, perhaps predictably due to their youth, holds the lowest savings, with the majority having under $10,000.

The average savings for Gen Z stands at $16,475, and a mere 19% possess a three-month financial buffer.

In contrast, Baby Boomers lead in preparedness, with nearly a quarter maintaining a sufficient rainy-day fund and averaging $26,440 in savings. Millennials follow closely with $25,794, while Gen X averages $21,088.

“It’s still really important to make sure we’re prepared for the unexpected,” ING head of consumer and market insights Matt Bowen said. 

“Whilst emergency funds aren’t popular, having some money in a high interest savings account can help when you’re in a pickle.”

But despite that disparity, the research found that not only are Gen Zers more likely to have multiple income streams than their older counterparts, more of them (69 per cent) are confident in the savings systems they’ve put in place.

According to the research, they are also the generation that is most likely to believe that higher earnings lead to more happiness, with 57 per cent holding that view, as opposed to 55 per cent of Millennials, 39 per cent of Gen X, and 23 per cent of Baby Boomers.

“We understand how difficult it is for Gen Zs right now in this economic environment – but it’s exciting that they are so proactive in securing their financial futures,” Bowen said.

“This generation has had the most access to wealth-building tools, research and platforms by far.

“And it’s interesting to see that while the research shows Gen Zs believe earning more money equals more happiness, that’s not at the expense of their mental health and wellbeing, as 59 per cent would take a pay cut for a job that is less stressful.”