Millennials to put ‘accidental savings’ due to COVID into property market
A silver lining surrounding the cloud of COVID has been the level of “accidental savings” Australians made in 2020, with many millennials putting that new-found cash towards property.
A silver lining surrounding the cloud of COVID has been the level of “accidental savings” Australians made in 2020, with many millennials putting that new-found cash towards property.
Treasury analysis from early 2021 confirmed that household savings climbed by more than $112 billion during the year to November. The pandemic-enforced penny-pinching has placed the household savings ratio – the rate of savings to income – at 18.9 per cent, up from less than 5 per cent prior to COVID’s arrival.
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Amy Lee and her partner Corey Lock, both 23, were among those accidental savers who discovered no Opal Card top ups due to working from home, cancelled holidays and limited entertainment options in 2020 inadvertently lead to them pocketing thousands in extra cash.
“I’ve always been savvy with my money and lived within my means, but since COVID I almost became a bit competitive with myself. I wanted to keep on saving instead of spending because I was getting a kick out of seeing the amount in my account go up,” she said, adding that the COVID climate even allowed the pair to move out of their respective family homes and take advantage of reduced rents.
“Even though we’ve just moved from the Blue Mountains to the city, and are still renting, we’re saving for a house deposit,” Ms Lee said, adding that prior to the pandemic homeownership seemed several years away.
Spurred on by seeing their savings grow, the pair signed up for ANZ’s Financial Wellbeing Challenge. Sam Wood, the former star of The Bachelor is the official trainer of the finance “bootcamp” and will digitally guide participants through six weeks of activities, videos and resources designed to get their finances into shape.
“What’s really good with the challenge is that you can actually put in how much you’re expecting to pay for a deposit and it’ll tell you how many years or months for you to get there. It’s given me the opportunity to learn a lot about investing and how to use the savings we’ve got; how to invest so we’ve got more money for our deposit. It teaches you how to nail your budget with the 50, 30, 20 method. Essentially, 50 per cent of your income goes to your needs, 30 per cent goes to your wants and 20 per cent goes towards your goals,” Ms Lee said.
“We developed The ANZ Financial Wellbeing Challenge as one way people can take control of their financial wellbeing and set themselves up for whatever this year might have in store,” said ANZ financial adviser Liana Cauchi. “We know 2020 was a unique and challenging year for many Australians. It highlighted how quickly financial circumstances can change and why we should all aim to continually manage and improve our financial situation,” she said.
Originally published as Millennials to put ‘accidental savings’ due to COVID into property market