The 5th annual RaboDirect Financial Health barometer, a survey of the financial habits of 2500 Australians aged 18 to 65, may shed new light on some old-hat perceptions.
You’re doing what with your money?
Different strokes for different folks, they say. However, baby boomers and Gen Yers both have a desire to save, albeit for different reasons: boomers know retirement is just around the corner, and the income tap will be shutting down soon. Gen Yers, on the other hand, are nesting – they need to get that Great Australian Dream taken care of.
When looking at both parties, there are some interesting comparisons. For starters, a surprising 34 per cent of baby boomers are not saving at all. Whereas less than half that amount (16 per cent) of Gen Yers are in the same camp.
Baby boomers have the biggest savings buffer. As they’ve been around longer and had more time to fatten the piggy bank, they can ride out any financial difficulty for almost six months. Whereas Gen Yers have only got a buffer of 3.6 months.
Weigh up your savings
How often do you check your bank balance? According to the RaboDirect Financial Health Barometer, older Australians check their bank balance more than their weight. 13 per cent of Gen Yers check their bank account once a month while 26 per cent are checking their weight once a month. Baby boomers have 26 per cent going over their bank records, while jumping on the scales is represented by just 22 per cent.
Almost one in four Australians (24 per cent) in both groups are saving less than they were this time last year. This scary statistic shows Aussies aren’t thinking about the future of their funds. Interesting though, when quizzed, 12 per cent of Gen Yers couldn’t identify the interest rate they were receiving on their savings account, with the stats revealing half that figure (6 per cent) of baby boomers being in the same boat.
However, a big win for Generation Y is in the area described as “Shonky Savers”. This is a term used to describe those who save in a low-interest account, like a transaction account, instead of a high-interest savings account or term deposit. Compared across the full spectrum of generations, including Generations X and Z, Gen Yers came out as the group least likely to be dud savers, with an impressively low 32 per cent falling into that category.
For those curious boomers, the news isn’t too flash: your group scored much worse with 38 per cent – second only to the very shonky Gen Z group.
Four tips to combat the statistics
Now you know the facts, you have the opportunity to be an exception to the rule. Here are four savings tips to get you ahead of the pack.
1. Move from Shonky Savings to Super Savings
If your hard earned cash is sitting in a low-interest account you aren’t doing yourself any favours. Make the move to a high interest savings account that will help your nest egg grow.
2. Check your bank balance
In a tap-and-go world it is easy to lose track of where your money is going. Checking in on your bank balance at least once a month can help you stay on top of your spending and stick to your budget. It's easy to do on our Mobile Banking App.
3. Dream big
Saving is much easier when you have a goal in mind. Setting a goal – no matter how big or small – will help curb your spending and help to boost your savings.
4. Create a five year plan
Have you thought about where you want to be in five years? Writing it down on paper can help you visualize your future. That’s where the money comes in: will you have enough money to fund your future lifestyle? A realistic plan puts it all in perspective.You don’t have to be another saving statistic. Defy your generation and get ahead with your savings. A few changes to your habits can help you be financially healthy and happy with your lifestyle.
Disclaimer: Any advice contained on this post is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs and because of that, you should, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs before acting on the advice.