WA households expect to shrug off gloom: survey

Nearly 80 per cent of Western Australians expect to be able to shrug off the ongoing global economic turmoil over 2012, despite 34 per cent expecting the local economy to deteriorate, a survey released today says.

ING Direct’s latest Financial Wellbeing Index showed WA households continued to prosper over the last quarter of 2011, with the state’s index score rising from 105.9 in Q3 to 108.8 in Q4, up on the national score of 105.6.

The index score is calculated by surveying six aspects of financial wellbeing, including credit card and mortgage debt, savings, investments, household income and ability to pay bills.

Key findings of the survey included 42 per cent of WA households reporting building extra savings, 42 per cent reporting reduced unnecessary spending, and 27 per cent saying they had improved household budgeting.

Conversely, 35 per cent of respondents said their financial wellbeing declined in the past year, due to rising living costs, failed investments and increasing credit card debts.

Looking ahead, 34 per cent of WA residents said they expected the economy to struggle in 2012, but just 21 per cent expect their personal financial well-being to decline.

“WA households overall continue to enjoy high levels of financial wellbeing,” ING Direct chief executive Don Koch said.

“By focusing on growing savings and careful budgeting, households are building a buffer against any possible slowdown in the economy.

“The challenge of rising living costs is especially difficult for low income households, and this is an area where careful budgeting becomes essential.”