Aussies prioritise ‘building up rainy day savings’

According to ME Bank’s latest research, conducted by Pureprofile in December 2020, the majority (44 per cent) of 1,000 Australians surveyed have prioritised ‘rainy day savings’ as their top financial goal for 2021. This was third place in 2019.

Saving for ‘a holiday, car or other expense other than a home’ was the second most-cited financial priority for 2021 (37 per cent), with ‘saving enough to buy a property to live in’ rounding off the top three.

According to the survey, 22 per cent of respondents stated ‘saving for a residential property’ was a top financial priority this year (up from 21 per cent last year).

Additionally, the survey found that ‘paying off a mortgage’ has increased in importance, ranking in sixth place (16 per cent) this year.

Other top financial goals that had increased in importance this year included ‘reducing expenditure on expensive habits’, ‘setting up a budget or savings plan’, and ‘not building up any more debt’.

Noting these changing priorities, ME Bank suggested that there was “a desire to improve financial security” following the challenges of 2020.

Indeed, the study found that over half of Australians (54 per cent) said COVID-19 has ‘forced them to change their 2021 financial goals’, with two-thirds (66 per cent) saying the pandemic had ‘enlightened them with the importance of building up rainy day savings’.

The largest challenges Australians faced when reaching their 2021 financial goals were found to be ‘inadequate incomes’ (41 per cent) and ‘expenses’ (37 per cent). This was followed by the direct ‘impact of COVID-19’ (28 per cent).

ME’s general manager of personal banking, Claudio Mazzarella, stated that the findings reflect a step in the right direction, given ME’s latest Household Financial Comfort Report showed that 21 per cent of Australian households had less than $1,000 in cash savings.

“In uncertain times, it pays to focus on what you can control. Growing a stash of emergency money can be good for your bank balance – and your peace of mind…

“The majority of Australians will be saving more and thinking about what to best do with their money in 2021,” Mr Mazzarella said.

[Related: More home owners expect house price rise in 2021]