In July, Mozo conducted research into how the spending habits of Aussies had changed throughout the COVID-19 pandemic.
We found that 25% of Aussies have undergone a financial ‘wake up call’ and are now taking steps to abolish debt, while 39% said they would be spending less money on non-essential things, like eating out.
And according to new research from Buy Now, Pay Later (BNPL) platform Openpay it looks like that money savvy mindset has set in.
Openpay found that 70% of Aussies are spending more consciously than they were before COVID-19. More than half (60%) of Sydneysiders and Melbournians have even limited themselves to ‘essential spending’ only.
Some of the purchases Aussies are choosing to delay include, upgrading or replacing furniture and home renovations and improvements.
Buy Now, Pay Later usage soars during pandemic
Although many Aussies are tightening their budgets, almost a quarter of people in Sydney and Melbourne have opened a BNPL account to manage their spending - 31% of respondents have at least one BNPL account, while a third revealed they had more than one.
“With the recent impact on personal finances due to COVID-19, frivolous spending is a thing of the past. Despite this, essential items still need to be paid for,” said chief marketing officer global, Openpay, Georgina Whalley.
Those in Melbourne appear to be the most financially vulnerable, which could be a result of the current lockdown restrictions, with 45% saying they use their BNPL account at least once a week, compared to those in Sydney (34%) and Brisbane (22%).
In terms of what Aussies are choosing to use their BNPL account for, 60% said their spending has been on healthcare for either themselves, their children or pets.
“Given that Australians are even worried about spending when it comes to their teeth, with 22% of those surveyed saying they have put off spending on essential dental work due to economic difficulty or fear, BNPL is a means of ensuring our health isn’t left to suffer,” said Whalley.
Returning to pre-COVID spending could take a while
While there’s no telling when the COVID-19 pandemic will end, it could still take some time for many Aussies to feel comfortable spending again.
Overpay found that one in three respondents will be back to their regular spending habits within the next six months, another third said it would take six to twelve months and one-fifth believe it will take one to two years.
So if you’d like to get a jumpstart on building your savings stash for a post-COVID world, you’re going to need a top notch savings account! You can compare more than 200 savings accounts from over 60 banks by using our savings account comparison tool.
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