Budget Direct’s survey of 2,800 Australians aged 18-24 (summarised in the infographic below) found that 64% of this age group of millennials didn’t have a savings plan.
Of those who had savings plans, 32.6% said saving for travel was their number one priority compared to 16.7% who were focusing on saving for a house deposit.
Is this a symptom of young Aussies viewing home ownership as unattainable in today’s economic climate as housing prices soar? Or is it just a matter of wanting to get out and explore the world before settling down later in life?
The survey showed 29.8% of respondents expect that it will take them over five years to save for a house deposit and other research suggests they’re not far off the mark. Bankwest’s First Time Buyer Deposit Report shows it takes an average Sydney couple over eight years to save for an average deposit ($215,000) to buy a house. In Melbourne, it takes 6.2 years to save for an average deposit of around $150,000.
Alarmingly most of those surveyed (36.4%) only managed to save less than $100 a month, making it virtually impossible to reach a $215k deposit in Sydney or $150k in Melbourne, even for a couple.
These results suggest young Australians are pessimistic (with good reason) about housing affordability and are generally struggling to save for not only their own home, but holidays, weddings, cars and consumer goods.
The moral of the story is regardless of whether you’re saving for your first home, a new car, travel or a bigger TV, it pays to get into good habits early in life and more young Australians could definitely benefit from financial planning and setting savings goals.
A great tool to put your finances back on track is the Savings Goal Planner. Its simple interface and handy suggestions on how to reduce expenses makes achieving all your financial goals easier to follow through than ever.
You can even print off PDF versions of your planned weekly savings to put up on the fridge, pinboard or wall to keep motivated.
For more ways to buy a home sooner check out our blogs on how to save for a home deposit as efficiently as possible, tips for saving money while renting and how parents can help their kids get onto the property ladder.
The Homely Team