New research has found younger Aussies are better at saving than baby boomers

A new report by an Australian bank has found millennials are better at budgeting than older generations.

New research has revealed Millennials are budgeting better than baby boomers since the wave of financial uncertainty sparked by the coronavirus pandemic last year.

A report by NAB’s digital subsidiary UBank has found Australians have continued to show positive savings behaviour in light of the pandemic, with younger demographics more likely to use some form of budgeting tool compared with their older counterparts.

According to UBank, 70 per cent of millennials are likely to use a budgeting tool, while only 66 per cent of baby boomers sometimes used tactics to save money.

UBank chief executive Phillipa Watson said it was an “encouraging” sign that younger Australians were prioritising saving.

UBank CEO Phillipa Watson says it is ‘encouraging’ that younger people are choosing to save. Picture: Supplied

“What we’re seeing is that millennials are using budgeting tools more than any other demographic,” Ms Watson said.

“This is particularly encouraging because we know there’s a direct link between budgeting behaviours and reaching your financial goals.”

Last year’s pandemic prompted Australia’s first economic recession in nearly 30 years, fuelling a major savings push by households as a result of the heightened uncertainty around job security and income.

UBank is a digital subsidiary of NAB. Picture: NCA NewsWire / Dan Peled

UBank’s July survey found 19 per cent of Australians were using some form of savings measure, while the latest update recorded 47 per cent of respondents were now budgeting.

“If the past year has shown us anything, it’s that setting money aside for a rainy day is not enough to sustain us through long periods of economic disruption,” Ms Watson said.

“It’s encouraging to see Australians continuing to implement the positive savings behaviours they picked up during the pandemic well into 2021.”

Gen Z, according to the report, were the least likely to implement a budgeting framework, while 46 per cent of Gen X who were surveyed said they had started managing their funds due to the economic situation.

Millennials are more likely to use a budgeting tool compared with any other generation. Picture: Supplied.

Approximately 41 per cent of respondents said they would continue to minimise spending on non-essential goods and services while the economy was affected by COVID-19.

Several banks, including UBank, Commonwealth Bank, and Westpac, have integrated budget planners within mobile and online banking apps.

“Customers should be taking advantage of these to ensure they’re staying on track and holding themselves accountable,” Ms Watson said.

“It might sound obvious, but there is a direct link between budgeting behaviours and reaching your financial goals.”