A Bankwest analysis of savings goals of Western Australians has revealed a shift in priorities, with many saving for a future home or renovations.
At the same time, saving for travel has been scaled back as international and interstate border closures have continued amid the coronavirus pandemic.
Bankwest examined data from more than 100,000 entries in the savings goals feature of the Bankwest app, and compared the results of August 2021 and August 2020.
It found that over the past year, the volume of home-related savings goals (which could include saving for a home loan deposit for aspiring home buyers as well as renovation funds for existing home owners) has doubled across generations.
Home-related goals increased by 120 per cent across all generations, and by 144 per cent among Baby Boomers (aged between 54 and 73), 139 per cent among Gen X (aged between 39 and 53), 129 per cent among Millennials (aged between 23 and 38), and 100 per cent among Gen Z (aged between 14 and 22).
Meanwhile, saving for a home has taken priority among Millennials, with 21 per cent of the cohort saving for a home, with this figure at 15 per cent among Gen Z, 14 per cent among Gen X, and 9 per cent among the Baby Boomers.
Across the generations, 16.7 per cent of Western Australians were saving for a home in August 2021, up from 15.1 per cent in August 2020.
While travel has maintained its second position as a proportion of all savings goal across all generation, the proportion has unsurprisingly dropped in August 2021 (18.7 per cent) as border closures have continued, compared with 24.7 per cent in August 2020.
Young Western Australians led the way in terms of overall goalsetting, with Millennials accounting for 46 per cent of all goals set, and Gen Z making up 35 per cent.
The most popular savings category was “just saving” (28 per cent, up from 25.9 per cent last year), which could suggest that financial security is top of mind for respondents.
Saving for big purchases rose from 14.2 per cent to 12.8 per cent across all generations, and increased across each generational cohort, suggesting that savers were preparing to make significant purchases even while focusing on other priorities and goals, according to Bankwest.
Big purchases could include major discretionary purchases such as boats, pools, furniture, jewellery and weddings.
Commenting on the findings, Bankwest chief customer officer Paul Vivian said the COVID-19 crisis has increased financial uncertainty, evidenced by the growth in the “just savings” goal category.
He said: “The way in which Western 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 Western Australia’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 amid a rampant property market.”
Mr Vivian added that the surge in volume of big purchase goals has signalled respondents’ intentions to pour their increased savings back into Western Australia’s businesses, which could bode well for the state’s economy.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.