Those aged 25-34 are the best savers
THEY are young, educated and have a love for travel and finding a bargain.
Now, this financially fit group of 25 to 34 year old Generation Y consumers are surpassing Generation X and overtaking the Baby Boomers to become Australia's best savers.
Often described as a 'self-entitled' generation, the Suncorp Bank Australians' Saving Habits Report found Generation Ys are in the 'saving sweet spot' of life, whereby their earning potential has increased while they continue to enjoy a lower level of financial commitment.
The report also revealed this age group prefer to use their financial 'power play' to save for a holiday (32 per cent) rather than the traditional bricks and mortar (24 per cent).
Suncorp Bank Regional Manager, Monique Reynolds, said it appeared young Australians increasingly favour intangible experiences over tangible assets when deciding how to invest.
"On average, Australians aged 25 to 34 are saving $533 per month (12.7 per cent of their personal income). This is $100 more than the national average (11.5 per cent or $427)," Ms Reynolds said.
"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.
"The saving strength of younger Australians could also be attributed to the fact that people in this age bracket are increasingly staying at home for longer, with the most current data indicating one in four adults (20 to 34 years old) are still living at home.
"However, a busy social calendar may undermine the saving capability of this financially fit group. The report revealed a large percentage of Gen Ys spend money going out to bars, cafes and clubs on the weekend, shop for new clothes and tend to save for engagements and weddings."
Other key findings
• Across the generations, food consumes the largest portion of our budgets. With Australians spending 17.5 per cent of their personal income on food, it comes as no surprise that Australia's best savers tend to take their lunch to work.
• Those living in Australia's capital cities save 50 per cent more than those living in the regions. Coupled with the higher average income of city dwellers, this translates into a saving of $478 per month compared with $325 for those living outside the capitals.
• Australians who own shares save 13 per cent more of their incomes than those who don't have a stock portfolio. Their higher average income translates into a saving of $669 per month compared to $346 for non-shareholders.
• Australia's best savers are more likely to go out to clubs and bars on the weekend. However, they do tend to take their lunch to work.
• Somewhat counter-intuitively, the best savers use their credit cards more than average. They are 34 per cent more likely to agree with the statement "I use my credit card for most purchases."
Men vs woman: Who does it best?
• Men save a significantly higher proportion of their income each month, 13 per cent vs 10 per cent. Coupled with a higher average income, the average man saves $507 a month compared to $346 for women.
• Men are more likely to be saving for an investment property while women are more likely to be saving for holidays and travel, homewares and house renovations.
Who is Australia's best saver?
A tertiary educated Generation Y man, who lives in a metropolitan region with no children, values quality over price and brings their lunch to work, tends to be Australia's best saver.
The Australian's Saving Habits report is the latest in Suncorp Bank's Cost of Living research series, designed to shine a light on Australians' financial behaviours and promote the benefits of budgeting and financial responsibility.