Chances are, you're better off than you realise. The latest figures from Roy Morgan show that Aussie households are worth an average of $1.016 million.

These figures don't take debt into account, but they're still pretty reassuring. Not surprisingly, our homes account for about half (50.1 per cent) our wealth, and despite falling property values, average gross household wealth is still $207,000 higher than it was five years ago.

The remainder of our wealth is held in super (24 per cent), rental properties (10 per cent) and cash (8 per cent). Just 5 per cent ($445 billion) is in direct investments like shares, and less than 2 per cent ($134 billion) is invested in managed funds. It's the significant holding of cash that's cause for concern. Australians are sitting on $738 billion in deposit and transaction accounts. Yet with interest rates at record lows, stockpiling cash can mean missing out on valuable returns.

Saving money is always a healthy thing to do. And it makes sense to have some emergency savings to fall back on.

However, there are ways to put surplus cash to work, earning a far better return than a savings account.

One option is using spare cash to reduce high interest debt. Paying off a credit card charging interest of, say, 19 per cent could see you save a lot more than you'll earn on separate savings.

Paul Clitheroe is chairman of InvestSMART, chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.