Young Australians put savings into holidays rather than real estate
30 June 2015 Bridie Jabour
People aged 25 to 34 save an average of $533 a month, and men save 46.5% more than women despite putting aside similar proportions of their income
A third of young Australians say they are saving for travel or a holiday, and only 14% are saving for a house deposit. Photograph: Alamy
Young Australians are more likely to save for a holiday than a house, with men saving 46.5% more a month than women in absolute terms, even though both save a similar proportion of their income.
Australians aged 25 to 34 are saving $533 a month on average, according to Suncorp Bank’s latest cost of living series on saving habits, and the national monthly saving average is $427.
Asked what they were saving for, 32% said travel or a holiday, and 14% were saving for a house deposit. The International Monetary Fund has rated Australia the third most expensive country in the world in which to buy a house.
Suncorp Bank’s regional manager, Monique Reynolds, said the results indicated young Australians wanted “intangible experiences over tangible assets”.
“While property investment appears to be a big motivation amongst this group compared to other generations, it is interesting to see their motivation appears to be heavily focused on a holiday and other social experiences, rather than the traditional Australian dream,” she said.
The biggest savers were urban, university-educated generation Y men with no children. One in five Australians said they generally did not save any of their personal income. They were more likely to be retired, unemployed or homemakers.
It also found a gender gap; men on average saved $507 a month and women $346. But this was not because women were worse savers. Once the results were controlled for employment status there was no difference between the proportion of income saved by men and women.
“Men are more likely to be saving for an investment property whilst women are more likely to be saving for holiday/travel, homewares and house renovations,” the report said.
The survey quoted Australian Bureau of Statistics figures that show 51% of men aged 18 to 64 work full time, compared with 26% of women.
The survey found food was the biggest item for all Australians at 17.5% of income. Rent or mortgage payments made up about 11.5%. However, this is because the cost was evened out across age and population. Other surveys have found many people pay about 30% of their income on housing.
A person’s age, whether they have children and where they live all have a significant impact on saving ability – people in cities save 50% more than those in the regions.
“The proportion of personal income saved each month peaks during our younger years, declines through our late 30s and 40s before increasing slightly in our 50s,” the report said.
“This is in line with the findings of Richard Finlay and Fiona Price in their 2014 Reserve Bank of Australia research discussion paper, Household Saving in Australia. Younger age groups have fewer financial commitments and are more likely to be saving for a first home, middle-aged are more likely to have children and a mortgage, and saving starts to build back up as we enter pre-retirement.”
The survey was carried out last month and involved 3,102 people ranging from 18 to 64 taking part in online interviews. The results were weighted for age and gender proportions in the general population.
Source: The Guardian
22 June 2015