How the pandemic inspired Aussies to save money and remain frugal

It’s not a secret that people’s incomes were impacted over the last two years with the months we spent in lockdown, but recent findings show that the pandemic has helped increase Australians’ desire to save.

Since the recent Omicron outbreak, findings by Toluna’s Global Consumer Barometer Study show that Australians have become increasingly concerned about their finances. Almost half (48%) of Australians are concerned about their financial security because of the pandemic, with over a third (37%) stating they’re now financially worse off than they were before the pandemic began.

Women have been impacted on a larger scale than men with research showing that 30% of women are financially worse off as a result of the pandemic, compared with only 35% of men. Similarly, only 28% of women report feeling secure in their jobs, compared to 40% of men.

Young people (18-24) have also been significantly financially impacted by the pandemic, with 48% of young people stating that they are now financially worse off than they were before the start of the pandemic.

It’s not all bad - Aussies are saving

Despite increased uncertainty and financial hardship, a recent report by the Melbourne Institute finds that Australians have a 42% higher median savings balance in December 2021 compared to December 2019.

According to Professor John de New from the Melbourne Institute, this reflects the willingness of Australians to hedge against both COVID and non-COVID related uncertainties.

This is most likely due to the decreased level of job certainty felt by many Australians, resulting in the desire to save in order to create a safety net to fall back on in case of further lockdowns or unemployment.

The result of the hardship can be seen in the way people spent money over Christmas in 2021.

Toluna’s study found that almost half (47%) of respondents said they were concerned about being able to afford the cost of the Christmas break. It was recorded that 25% of Australians did not save for Christmas at all and, as a result, 42% of people used credit options while Christmas shopping.

Thinking about your money in 2022? Here are some tips to save

With saving being a higher priority for more Australians, it is important to know how to budget your money and spend smartly in order to maximise your savings.

Make a budget and try to stick to it

Start by reading Mozo’s guide on how to create a budget.

Make a savings goal

Make a realistic savings goal for the year and think about how much you will need to save each week or month to meet this goal.

Consider signing up for a round up app

Apps such as Raiz and banks like Up offer the option to choose to “round up” each transaction to the nearest dollar or five dollars and deposit the extra into your savings account without you even having to think about it. It is a simple and effective way to add a little bit to your savings every time you spend money.

In order to continue increasing savings, things such as budgeting and looking into high interest term deposits or savings accounts are a step in the right direction.