Younger Australians are increasingly cutting back on non-essential spending and redirecting that money into high interest savings or offset accounts, data suggests.
New consumer sentiment data from NAB Economics reinforces emerging TikTok trends which show Gen Zs embracing a ‘cash conscious’ attitude, capitalising on cutbacks on increasingly expensive non-essentials.
Australians under 30 are most commonly cutting back on eating out at restaurants ($124), micro treats like coffees, snacks and lunches out ($73), entertainment ($64), car journeys to save on petrol ($70), food delivery services ($96) and streaming services ($30).
NAB Personal Banking executive Paul Riley said younger Australians were embracing the ‘loud budgeting’ trend, saving on average $450 each month.
“In 2024, being ‘cash conscious’ is officially cool with terms like ‘loud budgeting’ emerging overseas and on social media”, Riley said.
“‘Loud budgeting’ is all about unapologetically prioritising your own financial goals, setting smart boundaries on spending, and feeling comfortable to talk about it openly and authentically.
“Rather than going out for an expensive dinner with friends, younger Australians are confidently opting to stay in and choose to put that amount into a high interest savings account or pay down debt.
“The other hot budgeting trend is ‘no or low spending months’ which involve giving up alcohol, takeaway food or shopping for clothes or beauty for the month, not booking holidays, food prepping or bringing your lunch to work or finally asking mates to repay cash you’re owed,” he added.
More than half (56%) of Gen Z and younger Australians are using the money they’re saving – an average of $450 each month – to stash into their savings accounts instead.
“The younger you are, the more likely you are to stash that money into a high interest savings account or an offset account so instead of spending it, you’re saving it”, Riley said.
“We’ve seen steady growth in the number of younger customers opening savings accounts in the last 12 months and, despite cost-of-living pressures, savings account balances in this age group have risen too.”
The number of high interest savings accounts opened by Gen Z NAB customers has grown 24% over the last year and savings account balances belonging to this cohort have increased by 5.3%.
“Your bank can also help you keep a closer eye on your saving and spending, and most have easy and free tools that can automatically categorise where your money is going or help you set goals”, Riley concluded.
Moneysmart.gov.au is a trustworthy source of free calculators, tips and guidance including budget planners or a savings goals calculator.
