What Australians Are Saving Money For

What our different saving habits are and the top things we’re saving for.

Different people have different financial personalities. You might know a tight stinge who rarely opens their wallet and considers a bookmark to be a generous gift. But someone else might be at the opposite end of the spectrum – throwing their cash at everything and racking up extreme debts. Naturally, most of us are somewhere in-between with a relatively healthy combination of saving and spending.

Generally it doesn’t matter too much how you save money so long as you do it, yet interestingly, ASIC’s MoneySmart survey has shown that Australians can take some very different approaches towards doing so.

The different types of savers in Australia

Canstar Blue research in April 2015 found that when it comes to our finances, only around one third of Australians like to ‘live for today’. This suggests that while quite a lot of us are pretty laid back about saving, most understand the importance of it. This was evident across all age groups, although people aged 25-29 seemed more carefree, with 41% agreeing with the statement: financially, I like to live for today.

Let’s forget about the reckless non-savers for a moment and take a look at MoneySmart’s ‘Money Goals’ poll of 1,566 Australian savers.

According to the survey, Australian savers can classify themselves as one of four types:

  • ‘Dreamer’: 11% of participants identified themselves as someone who “has savings goals, but no real plan for achieving them
  • ‘Hit & Miss’: 24% of participants identified themselves as someone who “has a plan to achieve savings goals, but doesn’t always stick to it
  • ‘Slow & Steady’: 37% of participants identified themselves as someone who “saves small amounts regularly and will eventually get there
  • ‘Fast & Determined’: 28% of participants identified themselves as someone who is “really focused on saving as quickly as possible

When looking at the results as a whole, people mostly take the ‘slow & steady’ approach to saving. But when MoneySmart compared the responses between men and women, there was quite a difference.

Men actually preferred to take the ‘fast & determined’ approach to saving, with 36% identifying themselves as such (31% for ‘slow & steady’, 22% for ‘hit & miss’ and 11% for ‘dreamer’). On the other hand, women had a large preference for the ‘slow & steady’ approach to saving, with 39% identifying themselves as such (26% for ‘hit & miss’, 24% for ‘fast & determined’ and 11% for ‘dreamer’).

What we’re saving for

With around 70% of us believing that “money is important to be happy in life” (according to Canstar Blue research), we can derive what makes us happy in life (or at least contributes to it) by looking at what people save money for most.

In the earlier mentioned ‘Money Goals’ poll, MoneySmart asked Australian savers what things they were saving for. These were the top ten responses:

  1. 48% – for a home
    • 36% – to buy a home
    • 14% –  to renovate a home
  1. 47% – for a holiday
    • 18% – for a holiday within Australia
    • 39% –  for a holiday overseas
  1. 47% – for the future
  1. 33% – for an emergency fund
  1. 13% – for a car
  1. 10% – for education
  1. 8% – for furniture/appliances
  1. 5% – for a wedding
  1. 4% – for new computer/technology
  1. 8% – for something else

Based on the responses they received to the question, interestingly, MoneySmart judged that “women are more likely than men to save for more than one thing at a time”.

Techniques of confident savers

Unfortunately, not all Australians meet their savings goals over time. Sometimes life just gets in the way. Other times, we simply lose patience. For over a third of us (37%), dealing with money is stressful and overwhelming, according to the Canstar Blue survey.

Thankfully, we can share some common techniques which confident savers (from MoneySmart’s survey) claim to swear by:

  • 78% know how much money is needed
  • 75% have a clear savings plan
  • 73% regularly review their progress
  • 72% have a specific saving time frame
  • 43% tell their family and friends

Check out ASIC’s MoneySmart TrackMyGOALS app to help you achieve your money goals faster.

If you’re looking for a better savings account, use our savings accounts comparison tables to compare and find the best savings accounts with the highest interest rates.

 

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Photo: iStock | KIVILCIM PINAR

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