Most young Aussies have no savings plan: research
TWO thirds of young Australians admit to having no plans to save money or don't think their saving plans are working, according to new research.
A survey, commissioned by investment start-up app Acorns, asked over 1,000 Australians aged between 18 and 39 about their saving habits, finding that only one in eight Australians feel they are in a good savings position.
Young men were seen to struggle with finances more than their female counterparts, with men twice as likely to struggle with living expenses.
However it seems to be the women who feel they aren't making enough money, with 54% of women saying their income is preventing them from saving, compared to 40% of men.
The news doesn't get any better as we get older, the the pressure of debt more than doubling.
The need for an emergency fund almost triples between the 18-24 category and the 35-39 category.
39 % of 35-39 year olds said their main saving tactic is to 'save whatever is left at the end of month'.
George Lucas, Managing Director of Acorns suggests that a change in behaviour around saving is what is needed.
"The problem isn't necessarily the level of income or cost of living expenses, it boils down to the way young Australians prioritise saving.
"With nearly half of young people feeling that they don't have enough money to save after they have met living expenses, individuals need to stop and think about the best way to save before they spend."
"Money can be like a gas which fills the available space - you will spend what is in your spending account. If you save some before you spend then you may adjust your living expenses accordingly"
The research also revealed a change in saving mindset as Australians becomes older. Six per cent of 18-24 year olds listing the need to build an emergency fund as the primary reason for saving, compared to 17 per cent of those in the 35-39 year old category. With age also comes the pressure of debt, being the primary concern for 33 per cent of 35-39 year olds, compared to 13 per cent of 18-24 year olds.
"What we didn't expect to see was the older group of 35-39 year olds preferring to save whatever money was left at the end of the month, with 39 per cent of those in this age bracket taking up this tactic, said Mr Lucas.
"This was the largest sample of all age groups, a far cry from the national average of 28 per cent. This could suggest Australians in their mid to late thirties are feeling significant financial strain."
As for the way young Australians save, the majority of respondents (33 per cent) still believe traditional forms of saving such as using a high interest rate or long term deposit bank account is the best way to supplement their income. Over a third of young Australians have considered investing in the share market but are yet to do so, with 18 per cent of 18-24 year olds putting this down to being 'too young.'
"There's certainly a gap between desire and action when it comes to the share market for young people. Over half of 25-29 year olds indicate a high level of interest in learning about an easy way to get into investing, so the investment industry needs to look at new ways to help introduce this generation into the market, said Mr Lucas.
"No matter what savings strategy is preferred, the key take-out is that young Australians need to change their approach. Moving their savings goals a little higher on up on the to-do list would be a great start."