A Bankwest analysis of the savings goals of many young West Australians reveals a significant shift in their priorities, with many dialling back on saving for travel and focusing on saving for a future home or renovations.
Bankwest looked at data from more than 100,000 entries in the Savings Goals feature of the Bankwest App, comparing the results of August 2021 to August 2020, with a clear shift emerging in people’s spending focus.
Young West Australians led the way in terms of goalsetting, with Millennials (23 to 38-year-olds) accounting for almost half (46%) of all goals set, and Gen Z (14 to 22-year-olds) making up a third (35%).
Home savings experienced the biggest positive swings for Millennials and Gen X, who account for the majority of the market’s current home buyers and owners, with a fifth (21%) of the former focused on the goal.
Travel a year ago was close to the top goal category, having accounted for a quarter of all goals in 2020 (24.7%), but 12 months on, it was the only specific category to experience a decline in the proportion of goals (18.7%).
Travel as a proportion of all West Australians’ goals fell six per cent year-on-year, suggesting that even as vaccine rollouts gather momentum, expectations for heading abroad continue to decline amidst a world of restrictions.
However, despite the decline, Travel notably remained in the Top 3 savings goals for every generation and was second overall as a proportion of all goals, highlighting the prevalence of travel plans in goalsetting behaviour.
Financial security and the comforts of home picked up Travel’s losses, with Just Saving the most popular goal category (28%), and the growth of Home (16.7%) having it come close to overtaking Travel as second.
The Just Saving focus aligned with Bankwest’s savings data for the period, which showed personal savings balances grew 11.2 per cent year-on-year to August, and total personal balances up more than six per cent.
The volume of Home related goals, which can include home loan deposit targets for aspiring home buyers, as well as renovation funds for existing owners, also doubled across every generation over the 12-month period.
Big Purchases, despite featuring in only Gen Z’s Top 3 goals, led the growth charts across every generation in terms of volume of goals set, suggesting savers were preparing to buy big, even when focusing on other priorities.
The category accounts for major discretionary purchases, such as jewellery, boats, weddings, pools, and furniture.
Bankwest Chief Customer Officer Paul Vivian said: “The global pandemic has affected us all and continues to have a major impact in parts of Australia and the world, and we see that financial uncertainty in the Just Saving growth.
“The way in which West Australians have managed the past 18 months has led to a way of life that, in some ways, has changed dramatically, but in others has largely returned to normal, and that is reflected in this goal data.
“One of the toughest emotional costs of the pandemic has been the separation of families, be that across interstate or international borders, and it’s hard to not keep that in mind when viewing the decline in Travel goals.
“However, a significant benefit of WA’s management of COVID-19 is the continual growth of the state’s economy, and where Travel declines, we see categories such as Home soar amidst a rampant property market.
“The surge in the volume of Big Purchase goals also bodes well for the state’s economy, as people flag their intentions to reinject the significant increase in savings they’ve built back into WA businesses.”