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Australians improve their budgeting basics

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World Savings Day is a time to take stock of your money matters

Sydney, 30 October 2017: World Savings Day (31 October) implores millions around the world to be thrifty with their money, and it seems Australians have taken a step in the right direction when it comes to budgeting. According to research from Gateway Credit Union, nearly three in four (74.4 per cent) of Australians claim they regularly maintain a budget compared to only 59 per cent of Australians in 2005[1].

Gateway CEO, Paul Thomas, believes the results are a sign of the times: “Over the past ten years, our research shows, as a nation, we’ve become savvier when it comes to managing our money. Better technology and apps have a part to play in this trend. Greater access to digital tools and online information has made it easier to be more engaged and to take a hands-on approach anytime, anywhere.

“Not to mention in the current context that is seeing more and more households squeezed from a financial perspective, thanks to an increasing cost of living and stagnant wages, many households are forced to tighten the purse strings and become more stringent with their finances.”

While Mr Thomas believes maintaining a regular budget provides the necessary understanding of your financial movements, he also believes Australians should be doing more by way of saving.

“A good budget isn’t complete without an element of saving. That means a dedicated account that you consistently add to. Many neglect their savings by leaving it in an everyday transaction account, that usually has associated monthly account fees and very low-bearing interest or no interest at all. Instead, Australians could have their money work harder by utilising a high-interest saving account like a term deposit.

“In fact, term deposits are a great way to boost your savings. Not only do you generate higher interest than a transactional account, but you also have restricted access, which means you won’t be tempted to dip into your savings for impulse purchases,” said Mr Thomas.

Recent research from Gateway revealed Australians’ understanding of savings products is limited, with 72 per cent of Australians stating they did not know that you can request a term deposit for any length of time[2].

“When it comes to financial products such as savings accounts, home loans, personal loans and the like, many people just take them at face value. They don’t ask questions or enquire about tailoring products. You’re only as good as the products you use. You can be great at managing your money but if you have your money tied up in products and accounts that aren’t suitable then it defeats the purpose.

“World Savings Day is the perfect time to reflect and review your finances and the financial products you utilise. Budgeting and building a savings buffer should be part of everyone’s financial repertoire – they’re the basics everyone should master,” concluded Mr Thomas.  

Key findings:

·         74.4% of Australians claim they regularly maintain a budget compared to only 59 per cent of Australians in 2005 (Ipsos omnibus, May 2017).

o   Of those that don’t maintain a budget, the top reasons included:

·         72% of Australians do not know they can set their own length for a term deposit (Mortgage Holders Sentiment Report 2017).

o   74% of Gen Z do not know they can set their own length for a term deposit

o   73% of Gen Y do not know they can set their own length for a term deposit

o   75% of Gen X do not know they can set their own length for a term deposit

o   68% of Baby Boomers do not know they can set their own length for a term deposit

o   72% of Gen Z do not know they can set their own length for a term deposit

 

END



[1] The research, commissioned by Gateway and conducted by Ipsos, was compiled through the May 2017 omnibus, which polled 1,039 respondents across Australia.

 

[2] The Gateway Credit Union Mortgage Holder Sentiment Report is the collation of data gained through a quantitative survey conducted through an online panel. The survey was in field September 2017, obtaining 1,030 respondents across Australia.