Pandemic leads to improved saving behaviours amongst Australians

• Four in 10 Australians planning to cut gym memberships
• Australians resolving to spend less on gambling (43%)
• MyState Bank reveals how to make money resolutions stick in 2021

As we embark on a new year COVID-19 has forced us to re-evaluate many areas of our lives with the latest research from MyState Bank indicating many Australians are embracing the money learnings arising from the COVID-19 pandemic, leading to widespread shifts in spending habits.

MyState Bank asked more than 1,000 Australians what their biggest financial resolutions and concerns are coming into 2021. Overwhelmingly, the research found that close to half (48%) are resolving to be better money managers by reining in spending on discretionary items over the next six months. This was followed by starting and maintaining a budget, which almost three in 10 Australians pledged to do in the new year.

MyState Bank General Manager, Customer Experience, Heather McGovern said, “One of the silver linings during this period is how the pandemic has encouraged consumers to review their spending habits with the end goal of better money management. The pandemic has profoundly altered the daily lives of Australians, ushering in a new-found respect for the benefits of savings.

“More consumers are actively questioning their needs versus wants at the checkout, and according to our latest research, aligning their financial behaviour accordingly. It is encouraging to see many Australians seeking out ways to build a financial buffer, whether that is by having a staycation, cooking more at home, or swapping the gym for outdoor exercise.

“We expect these savvy savings habits to continue, with these new behaviours among consumers outliving the recession.”

Paying off interest-accruing debt also proved high on Australians’ list of new year money resolutions, with one in five planning to pay off their mortgage faster. Meanwhile, 17% of consumers resolved to tackle credit card and personal loan debt.

Moving into 2021, despite news that the Australian economy is officially out of recession, there are a number of Australians (44%) still holding concerns for the nation’s economic outlook. The research also found 35% of Australians reported concern with not having enough savings, while a quarter are worried about job uncertainty.

Vacations, public transport, and gambling to secure less wallet share in 2021

When asked about spending intentions in the new year, half of respondents said they expect to spend less on vacations over the next six months, despite interstate borders opening for domestic travel. This was closely followed by public transportation, with 44% of Australians anticipating spending less in the first half of the year as many businesses continue to work from home.

While the start of a new year is often associated with getting fit, interestingly, MyState Bank research found gym memberships are on the chopping block with almost four in 10 Australians planning to cut the costs of working out.

“Despite life returning to some level of normality, our research shows the COVID-19 pandemic continues to impact Australian’s spending. For instance, the closure of gyms at the height of social distancing restrictions caused many Australians to invest in a home gym or complete workouts online. It seems some of these habits are carrying over well into the new year which can spell good news for our wallets,” said Ms McGovern.

Other major areas where consumers are resolving to spend less over coming months include gambling (43%), toys and games (40%), food takeout and delivery services such as UberEats and Deliveroo (36%), alcohol and cigarettes (35%) and skincare and makeup (34%).

However, Ms McGovern said even the best resolutions can fall by the wayside.

“Smart planning and the right approach can help you to make good on your financial goals and get the year off to a great start,” she said.

Here are MyState Bank’s six tips on how to make your financial resolutions stick well beyond the start of the year:

• Set SMART goals. The trick to staying the course is to set realistic and measurable goals. Many of us start the new year with the goal to simply save more money, however, the ambiguity of this goal can see it fall by the wayside after the first few months of the year has passed. Translate your goal from “I want to save more money this year” to “I want to save $5,000 by October.”
• Be clear on your ‘why’. Science shows many of us are much more likely to be successful in keeping a financial resolution if we have a clear ‘why’ – what’s in it for you. For instance, it is important to know the motivation behind your saying $5,000 – from funding a dream wedding to a dream home.
• Break it down to address the ‘how’. We rarely give much thought to the concrete steps that need to be put in place to achieve our money goals. This means breaking down your goals into smaller, achievable tasks. Using the saving money example, this might mean saying to yourself to reach my goal, I must put this much away every month.
• Check up on yourself on a weekly or monthly basis, or whenever you get paid. In some cases, your bank can do the heavy lifting for you – for instance, the Insights feature on the MyState Bank app provides a comprehensive overview of your financial situation including exactly what your money is being spent on and if any big bills or changes in income are on the horizon.
• Automate it. Some of the hard work towards achieving your money resolutions can be taken out by automating wherever possible. For instance, setting up a high interest savings account and getting paid directly into this account. The Autosavings capability in the MyState Bank app is another example, helping you recognise how much you can safely afford to save and moving the funds for you – without you having to lift a finger.
• Put it out there. Oftentimes, we use a friend or significant other to hold us to account on our fitness goals – our financial resolutions are no different.

Notes on research:
Nationally representative survey conducted by Pureprofile of 1,009 Australians aged 18 years and over between 27 and 30 October 2020.