ALMOST one in five Australians would struggle to come up with $1000 to deal with an emergency, while one in three people spend everything they earn.
A survey of almost 5000 Australians shows a deep divide exists between households that are financially prepared to cope with current and future expenses and those barely able to meet their everyday commitments.
It shows many Australians, including higher income earners, are unprepared for financial obstacles.
A total of 17 per cent of people surveyed would struggle to find $500 to $1000 to deal with an emergency, while 30 per cent were living from pay cheque to pay cheque.
More than 40 per cent of respondents said they were able to meet their monthly expenses, but a third admitted they were worried about their ability to do so.
Deanne Stewart, General Manager of BT, which financed the survey, says the results clearly show there are a large number of people struggling to cope financially day to day, and the problems are not always linked to the size of someone's pay packet.
"In many instances people are living in the hope that they will achieve their goals rather than planning for a fulfilling and secure future," Ms Stewart said.
"This has implications for their health and lifestyle, impacting on their levels of stress, and in the longer term influencing their enjoyment in the years after they finish work."
Surprisingly, 57 per cent of those surveyed had no regular savings plan.
This figure peaks among 45 to 54-year-olds who are often nearing the height of their earning capacity.
It showed almost 40 per cent of people would not have enough savings to maintain their present lifestyle if they lost their income for three to six months.
A third of people worry about not being able to meet normal monthly living expenses and more than half can't save what they want to save.