GENERATION Y have plans to save more money, work longer hours and look for better paid jobs, leading to them having more in their bank accounts than their predecessors.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The ING DIRECT Household Financial Wellbeing Index found Gen Y households in NSW have amassed the nation’s highest personal savings- an average of $27,103 per households compared to $12,057 nationally.
In addition, 57 per cent of Gen Y households plan to save more, compared to 41 per cent of all NSW households and 19 per cent of 18 to 35 year old households plan to work longer hours to increase their earnings, whereas only 11 per cent of NSW households have similar plans.
The study also revealed 31 per cent of Gen Y households will look for a better paying job compared to 19 per cent of all households.
Vice President of the Dubbo Young Professionals Network (DYPN) Peta Reardon said the statistics are fairly accurate for those in her social circle.
“I believe we are earning more than our parents or grandparents were in comparison.
“We are staying home longer to save. In some cases we are also higher skilled than our parents with education being so accessible and therefore earning a higher income,” Ms Reardon said.
She said she attributes Gen Y’s desire to save due to their desire to live in their own home, buy the latest gadgets and travel the world.
“Most people I know are saving, but saving with the purpose of having or doing something great at the end.
“I remember putting away a little extra money to buy my Dyson vacuum cleaner and one of my friends exclaimed at the amount I’d spent she could buy international airfares.”
Ms Rearson said having money put aside also acts as a safety net.
“I also think it makes life easier having that little bit of money somewhere that you can access if your car suddenly breaks down, you have an urgent trip or become ill. It’s nice to have a little cash lined security blanket.”
DYPN committee member David Graham said he also has a nest egg put aside if significant expenses arise, but said just working more and saving more is not the best message to give to Gen Y.
“We’ll be one of the first generations to have been paid superannuation our entire working lives, but I think that it has produced a financially lazy attitude that you have to work all your life in order to build your superannuation nest egg because when you stop working your income stops.
I’m not interested in superannuation, I’m interested in building a passive income stream well before I’m 65 that replaces my working income stream and I think that is a much better message to get to the next generation than ‘saving money is a good thing to do’.”
Orana Mutual Orana region area manager Ben Luck said the NSW statistics are on par with what he has observed in Dubbo.
Mr Luck said while he has no definitive reason for the savings, they could be due to increasing education on the importance of saving or because the younger generations are learning from the mistakes of their parents.
“It’s a good positive thing. It’s smart banking. They’re not going to be on struggle street as things get more expensive and the cost of living rises,” Mr Luck said.
He said the savings could also be Generation Y’s way of creating a safety net in the event of another Global Financial Crisis.
Mr Luck said having money put aside can also be beneficial when applying for a loan.
“By saving we can actually say ‘They can afford that’ because they’ve shown they can put money aside. It demonstrates discipline,” he said.
Macquarie Credit Union Business Development Manager Kevin Saul said the study highlights a positive trend of younger Australians saving, which is an extremely good outcome for all.
“What we know from Gen Y and others before them is a strong work ethic and desire to get ahead. We have a proud history of working with people in our community to do just that.”