Millennials and Gen Z struggle the most to meet savings goals – here’s how to buck the trend

Millennials and Gen Z are struggling the most to achieve their savings goals, despite being the most-likely age groups to set them according to data published in the 2024 Mozo SOS Savings Report.

42% of Gen Z and 41% of Millennials say they struggle to achieve their savings goals. Older generations also found it hard, with 33% of Gen X and 25% of Boomers II (aged 59 to 68) also admitting difficulty in achieving them.

Do Australians have savings goals?

So what is behind Australians’ struggle to save? Are we just too optimistic about our ability to put money away, or are our savings goals just too lofty that they are impossible to achieve?

Mozo’s money expert, Rachel Wastell, says that as cost of living pressures continue to squeeze households, it’s even more important to use savings strategies such as setting realistic targets and making sure you’ve got one of the best savings accounts possible.

“People put all sorts of unrealistic expectations on themselves when saving money, but it’s a bit like training for a marathon. You can’t expect to run 42km in week one – you have to work up to that distance bit by bit,” says Wastell.

“The key is to be realistic, and face your finances head on. In order to achieve savings goals, the first step is to gauge where you are now, then set achievable targets to get you to the finish line.”

The secrets for greater savings success

There are lots of changes you can make to cut down on your spending or grow your savings, but one of the ways you can maximise your money with little effort is by switching to a high interest savings account.

At the time of writing, the average savings account interest rate in the Mozo database is 3.47% p.a., but some accounts go up to 5.55% p.a. With this in mind, it’s a no-brainer to compare high interest savings accounts and make sure you’re getting a competitive rate on any money you are putting away.

If you’re serious about saving money, a good next step is to start a money plan. A really helpful tool for this is the ‘50-30-20 rule’, which is when the majority of your income goes to needs such as expenses (50%), a decent amount goes to wants (30%) and the rest is for your savings account (20%).

But, this might be understandably difficult for first-time savers, so you could be better off setting your savings ratio at a more realistic level – let’s say, taking 10 to 15% of your monthly income and putting it into your savings to start with.

Next, reduce spending

Once your savings habits have been taken care of, it’s time to move onto your spending. We have dedicated guides on how to create a budget, or you can start smaller by reviewing your monthly expenses such as internet and power bills.

Take note of how much you’re spending on these monthly bills, and from there, you’ll want to compare NBN plans or switch energy providers if you find a better deal. If you’ve got a car, it may be a good idea to compare car insurance as well.

There are also smaller adjustments you can make, such as limiting your spending by cooking at home, cutting down on your subscription services or leaving your shopping for major sale events – we’ve laid out simple ways to save money if you want more ideas.

The key is making your money count for more so with every cent you can save on those bills and ‘non-essentials’, the more you’ll have to put to your real savings goals such as an overseas holiday or a new capsule wardrobe.