Aussies continue to exhibit the healthy budgeting behaviors they adopted in the wake of financial uncertainty created by COVID-19, according to research carried out by UBank.
In July 2020, just 19 percent of Australians had implemented new budgeting strategies in response to the pandemic. Less than a year later, this number has risen to almost half (47 percent).
UBank chief executive Philippa Watson said: “If the past year has shown us anything, it’s that setting money aside for a rainy day is not enough to sustain us through long periods of economic disruption, so it’s encouraging to see Australians continuing to implement the positive savings practices they picked up during the pandemic well into 2021.”
According to the research, two-thirds (65 percent) of Aussies have some form of budget, and 43 percent of those say they have the tools and/or tactics to budget. A further 41 percent of Aussies continue to minimize spending outside of necessities.
Millennials (70 percent) are most likely to use budgeting tools at least sometimes, ahead of Baby Boomers (66 percent), Gen X (62 percent and Gen Z (60 percent) and are also considerably more likely (56 percent) than Gen Z (46 percent), Gen X (46 percent) and Baby Boomers (41 percent) to have implemented new spending and budgeting strategies in response to how the economy is faring.
“It might sound obvious, but there is a direct link between budgeting behaviors and reaching your financial goals,” said Watson.
“Many banks offer free budgeting tools, like UBank’s Free2Spend, as standard features on their savings and transaction accounts. Customers should be taking advantage of these to ensure they’re staying on track and holding themselves accountable,” she added.
Saving their paychecks
About 13 percent of Aussies can save half or more of their income each month, with 4 percent of those saving almost all of their monthly salary monthly.
Around 13 percent of Gen X estimate to save around a quarter of their income each month, ahead of Baby Boomers (5 percent) and Gen Z (4 percent).
On the other hand, Gen Z (28 percent) is considerably more likely than either Gen X (6 percent) and Baby Boomers (6 percent) to be saving half or more of their salary each month.
The research found that 38 percent of Australians save one-third or less of their monthly salary. It also found that 24 percent save either none or only a little bit of their monthly paycheck, however, this is an improvement on the 49 percent recorded in July 2020.
The UBank research jibes with a new survey from RFi Group which found that 32 percent of respondents plan to increase the amount they deposit in the next 6 months. Breaking it down into segments, about 64 percent of under 25-year-olds planned to stash more money in their bank account whereas that number dropped to 45 percent for those aged between 25 and 34 years. The numbers fell dramatically after that. Just 29 percent of those aged between 45 and 54 aimed to keep money in their savings account and only 11 percent for those over 55 years.
“Hence now is a good time for banks to be re-thinking at-call deposit propositions,” the RFi Group argued in the report.