The next generation of Australians are the future leaders in all our industries including IT. However, there are many problems that this group of people will face – rising house prices, higher fuel bills and a generally larger cost of living.
It is then pleasing to note the results of a recently released Savings Habit Report from Suncorp Bank. Based on these findings, the bank discovered that Generation Y is actually the best consumer group for saving money – much higher than Generation X and the generation preceding them – the Baby Boomers.
According to the statistics, Generation Y (those aged between 25 and 34) save on average $533 per month. This calculates to around 12.7 per cent of their personal income and is more than $100 higher than the national average ($427).
Suncorp Bank Regional Manager, Monique Reynolds explained how Generation Y are spending their hard saved cash.
“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 in a June 22 media statement.
“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) still live at home.”
In fact, 32 per cent of Generation Y respondents in the report were saving for a holiday rather than a home (24 per cent).
One of the important findings to come from Suncorp Bank was the description that Generation Y is living in a ‘saving sweet spot’. They have a lower level of financial commitment, but are yet enjoying the benefits of income rises.
Saving for the future
These local statistics seem to correlate well with recent numbers from the US. In a survey from TIAA-CREF, there was significantly lower number of Generation Y who we depending on superannuation moving into retirement, compared to those in Generation X and Baby Boomers.
In fact, 34 per cent of Generation Y respondents plan to save money for 25 years of retirement – higher than the 26 per cent average.
“Many in Gen Y came of age during the Great Recession, which helped shape their attitudes and outlook on their own finances,” said Teresa Hassara, executive vice president and head of Institutional Business at TIAA-CREF.”