We’re all aware of the generational stereotypes that are out there, so you could be forgiven for thinking that baby boomers are the most sensible financially, and that the slightly flighty Gen Ys see saving for a rainy day as about as useful as a paper umbrella. But is that really the case?
It’s easy to determine what your generational mindset is, based on your personal financial habits. This can even help you analyse your own spending and saving patterns, and – with any luck – give you some insight into how to become a better saver for your future.
The largest majority of people surveyed in our 2013 National Savings and Debt Barometer, who had no savings and would have no choice but to slink back to mum and dad if they lost their jobs tomorrow were – unsurprisingly – Gen Ys at 21 per cent. On the other side of the coin, 33 per cent of Baby Boomers believed that they would easily be able to survive for more than 12 months on their savings alone. Impressive, right?
Your saving grace
There are a lot more options out there than standard savings accounts and super funds. For example, high-interest savings accounts, which less than 50 per cent of participants in our survey owned, and fixed-term deposits offer higher rates of interest, both at a much lower risk than playing the stock market.
When it comes to regular saving, 33 per cent of Gen Y saves something every month, though not always consistently, while overall the vast majority across all three generations saved at least occasionally (21 per cent), regularly (31 per cent) or consistently (24 per cent).
Every little bit helps
Perhaps surprisingly, younger generations have already adopted some penny-saving ideas when it comes to their everyday budgeting. For example, Gen X (34 per cent) and Gen Y (36 per cent) are more likely to eat before they go grocery shopping to avoid purchases based on hunger-inspired delirium.
But Boomers take the prize in most areas of everyday budgeting. Writing a shopping list – and sticking to it! – when you do your grocery shopping and donning your DIY hat rather than calling a professional for small repair jobs around the house are clever characteristics that group you in with the Baby Boomers, whether you remember The Ed Sullivan Show or not.
Planning for the Future
Wherever you sit on the savings spectrum, there’s always room for improvement. Consider taking your monthly budgeting more seriously. Cutting down on your energy usage like a Boomer and shopping around for supermarket bargains like Gen X are great ways to reduce your everyday expenses.
Once you’ve brought down those overheads, try to add a certain amount of your salary to your savings every month. Whether it’s a small or large amount doesn’t matter – with a savings plan, this will build up over time – just as long as you keep it consistent and make sure it’s comfortable for you to maintain.
While the idea of consulting a financial planner can be daunting for some, many institutions will offer a free initial consultation that can help set you on the right path for your financial future. And remember, whether you’re 26 or 62, it’s never too early or too late to start saving.