Why Australians have become better money managers during COVID-19 pandemic

Cost-conscious Australians have reset their spending habits, helping them tuck away hundreds of dollars extra each month. Here’s how the pandemic has benefited hip pockets.

• The cash-strapped Aussies most likely to access early super
• Easy ways to recoup $10K in superannuation

Cost-conscious Australians are becoming much better money managers during the pandemic and many are tucking away hundreds of dollars extra each month.

The lockdowns and restrictions across the country have benefited many people’s hip pockets – three in four said it has changed the way they will manage money in the future.

New independent research commissioned on behalf of Westpac found:

• 20 per cent are saving an extra $442 per month.

• 52 per cent are spending more time managing their money.

• 62 per cent realise they were spending money on things they don’t need.

• 35 per cent have saved extra by spending more time at home.

Retail store manager Maddie Porra, 27, is on JobKeeper and said during the pandemic she has been able to become better at managing her money. Picture: Tony Gough

Westpac’s head of savings and investment Kathryn Carpenter said during the pandemic many people have become “a lot more conscious about how they spend and save during this time”.

“It’s been an opportunity to reset their spending and savings habits and they have been forced to be aware of their outgoings," she said.

“People should set up a dedicated savings account that is separate from your spending accounts.

“It’s not about how much you save but it’s about how regularly you save.”

And despite latest Australian Bureau of Statistics data showing the largest GDP fall on record of 7 per cent, many people were spending less but saving more.

Fashion store manager Maddie Porra, 27, from Melbourne’s inner suburb Carlton North has been receiving the $1500 fortnightly JobKeeper payments since the end of March and has focused on slashing down her credit card debt.

“I had about $4500 owing and I’ve paid off about $2000 of the debt,” she said.

“I’ve saved money on petrol and parking that I spent going to work and dining out and clothing, I’ve changed a lot of my habits and have been more conscious of spending.”

Mr Porra said her income has fallen by about $400 a fortnight during the pandemic and she remained patient to see when restrictions in Victoria will ease so she can return to work.

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Financial adviser Scott Haywood said many Australians have often used excuses to put off managing their money because they did not have the time to do so.

“Too often people said, ‘I’m too busy’”, he said.

“They haven’t been too busy, they’ve been stuck at home in a jail cell.

“They are willing to cook and do more things at home which saves them money.”

Mr Haywood urged Australians to try and build up a buffer of at least three months’ worth in living expenses.

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TIPS TO SAVING

• Start small, tuck away a realistic amount each week.

• Set up a separate bank account.

• Automate your savings.

• Put the money in account you can’t easily access.

Originally published as Why Australians have become better money managers during COVID-19 pandemic