Aussies and saving money

I've observed that many of my Aussie colleagues seem to be terrible at saving money. I wonder why that is the case? Is it a cultural thing of they value other things?

For example, I was speaking to a colleague in their 50s who is in a senior role. The colleague would be earning over $120,000 before tax per year. The colleague and his family are hoping to save a little under $20,000 in a few years time to allow them to do something nice for their family. The colleague and family has decided that they will put away x amount of money from their pay packet each fortnight. The colleague was thinking about opening a different savings account.

I was surprised to hear this as I would have thought they would be able to pull out that money from their savings at any point.

This observation doesn't seem to be just mine. For example, this article talks about "The number of Australians who feel that they are in full control of their finances is only around one in five, according to UBank." Why 86% of Australians don't know their monthly expenses

I come from a migrant family and my parents instilled in me the importance of saving money at a young age. So my default position is to not spend money if possible. Even though I'm much younger, I'm able to take out money from my offset account if I go on overseas holidays.

I may be ignorant as my parents also financially supported me much more than many others. For example, they paid for most of university education, allowed me to share their car and allowed me to stay in the family house in my 20s (I pay board).

I've noticed that many children who come from middle class migrant families are focused on buying their PPOR or IP in their mid to late 20s. However, it seems less common for my Aussie colleagues to have that same focus - some seem to be more interested in paying for personal training sessions, nice holidays, nice meals etc.

I'm generalising as I also have young Aussie colleagues who bought a house in their early 20s. I know there are many Aussies who are great savers (I'm sure there are many are on this forum). I'm thinking it also depends on the type of colleagues - perhaps those working in the corporate world may be different.

Thoughts anyone? I'm genuinely interested.

 

Making 120k in your 50s is a senior role?

 

I don't exactly know how much. It might possibly be closer to 150k counting overtime.

 

I wonder what the colleague does - people on a salary (includes all professional jobs) don't get paid overtime!

 

"For example, I was speaking to a colleague in their 50s who is in a senior role. The colleague would be earning over $120,000 before tax per year. The colleague and his family are hoping to save a little under $20,000 in a few years time to allow them to do something nice for their family. The colleague and family has decided that they will put away x amount of money from their pay packet each fortnight. The colleague was thinking about opening a different savings account.

I was surprised to hear this as I would have thought they would be able to pull out that money from their savings at any point."


It looks like this colleague has kids and kids are expensive. @Sheldrick doesn't have kids and so he possibly hasn't needed to think about where all his spare savings would be if he was married, had kids and was buying his own car and one for the Mrs. In my experience, Aussie families tend to NOT help their kids through Uni.

 

Yep.

 

Great point Angel

 

Not even sure what you’re post is about to be honest. But the one thing you said that I agree with is that you’re generalising.

 

Married not a big contributor but kids can certainly impact savings BUT it you have clear view on what are needs vs. wants then spending can be reduced. E.g. being single car family, buying car second hand ...actually buying lots of stuff second hand, sending kids to public vs private etc. keep in mind the median wage is about 56k. As you quite rightly noted 120k is a very well paying job.

 

It is irrelevant whether they are Aussies or migrant kids, what matters is what values have they been instilled from their families in terms of money or savings, IMHO.
It's like if you have been brought up eating bananas early on in your life, even though you may stop eating them eventually you will revert to eating them (at least that's what some psychologists conclude).
Also, you forget people at various different stages have different wants/needs, and different family units, so a 20 year old will spend differently as opposed to 30, 40, 50, 60 etc... year old.
Overall I suppose people are not such good savers and the government knows this hence why they take tax out to be paid first, even before the employee's pay, as history illustrates.
Consumerism, conformity and billions spent on marketing, also tempt more people to be influenced even without them realizing it.
Availability of easy credit has certainly enhanced that, imagine some not only have $0 balance now but actually a negative balance is possible too.
Yet, it is really up to every human to have total control over their life or finances, if they chose to, but sometimes our hearts and emotions overtake our thinking and brains or logic, beat's me why?
If we have more 'bad money' habits we will be worse off, if we have 'better money' habits we will be better off. Such simple concept yet not easy for many to follow, why?
Well like dieting, we all know what we should do, eat better, healthier, less, exercise or move more yet we have obesity and health challenges today, yet we don't do that.
So IMHO, people dislike change, and if they have more bad spending habits they don't realise they need to change to form more better savings habits instead.
Like say you decide to brush you teeth say every 3 days, instead of twice daily and flossing, if you don't brush regularly and floss the cavities and bad teeth will form. All it takes is to change to more good habits, right?

 

So how are you defining “Aussies”? Surely all permanent residents qualify?

You get spenders and savers in people of all different origins, and it is arrogant to assume any demographic is “better” at saving than another. Individual upbringing and priorities all play their part. You cannot just take your small circle of relatives, friends and acquaintances and assume they are a representative sample.

And you cannot assume you know the true financial position of anyone else. Only my husband and I know our true financial situation - it is no-one else’s business. Comments I made at work were often deliberately misleading.

And who is to judge? One may spend all their income on investments and accumulating assets, whereas another may be happy to live in a modest house but spend most of their income on travelling the world. Or maybe even earn minimal income and spend most of their time at the beach. One is not “better” than the other, just different priorities.

 

I'm not sure how I would exactly define "Aussie". Although I speak fluent English with an Aussie accent and have been in Australia pretty much my whole life, I don't identify myself as a "true Aussie". This is because I resonate deeply with my country of birth. I often compare the two cultures that I'm constantly travelling in between - the one I'm in at school/uni/work, and my cultural heritage in my personal life.

At the risk of having holes in my definition, I'll have a go at what I perceive to make a person culturally Aussie: if a person whose parents and grandparents have lived in Australia. This is a guide and an imperfect definition.

I'm interested in whether or not culture plays a role in influencing a person's money habits. I did a 2 minute google search and found some interesting articles:

"Immigrants from cultures with high saving rates also have higher saving rates in the UK. This finding is strong for first- and second-generation immigrants. It is even present in the third generation (Figure 1)."

Interesting that this article seems to suggest the Chinese are big savers.


Culture matters in saving behaviour | VOX, CEPR Policy Portal


Culture Affects How People Save Money

"The authors found that migrants from cultures with high saving rates did tend to save proportionately more once in the UK, a finding especially strong for first- and second-generation immigrants, but present even in the third generation. Among the countries with high saving rates: China and Ireland. On the lower end: Pakistan and Uganda."

 

Even siblings will have different approaches to money.

This is a slippery slope that just leads to meaningless stereotyping.

 

Aussies

 

Now you got me lol

There are too many bogans in this country.

Mt Druitt is the Mecca. There is no annual pilgrimage there. More like a daily pilgrimage to Centrelink and the Local Court house.

We have to build wealth. Better for everybody. Less dependence on Social Security. Better educayshun. Better country.

Start a convert a bogan program. I'm half way there to being converted and it feels good.

 

Centrelink merged with Medicare a while ago,I merged by going in there in my best pluggers and a bintang singlet, you don't roll one of your own