According to a new report, the pandemic has changed the way many of us think about our financial future, with almost half of Australians expecting the next few years to be very difficult. This has led many of us to rethink our financial priorities and focus on saving money for the future, whether to protect against future emergencies or to pursue future opportunities.
Five ways of thinking
The Brand New Australia report from research agencies The Lab and Nature looks at the attitudes and behaviour of Australians in a post-COVID-19 world. Among its findings were that 48% of Australians expect the next few years to be very difficult financially.
The report split the respondents into five broad groups:
- The Safety Seekers (26%), who won’t be able to relax until a vaccine is developed, and meanwhile prioritise keeping up with friends.
- The Simplifiers (20%), who want to lead less complicated lives in the future, leading to them re-evaluating their spending habits and focusing on saving money.
- The Opportunists (20%), who see the pandemic as a chance to rethink and reset how they are living.
- The Strugglers (18%), who are concerned about the future, but more about their finances, making saving money a top priority.
- The Returners (16%), who want life to return to exactly how it was before the pandemic.
Other recent studies have also found that Australians are rethinking their attitudes to finance. For example, NAB’s Household Financial Anxiety Index indicates that while Australians are starting to recover their financial confidence, this could change if government support and financial relief became unavailable.
Westpac and ING found that more Australians are now looking more closely at houses where we could spend more time working from home. And a JD Power study found that many Australians, especially millennials, were spending less on their credit cards and looking into switching to cards that offer improved value.
Ways to protect your future finances
If you’re concerned about your financial future as Australia rolls through a recession, you’re not alone. There are many options available to you, but the best path to take may depend on your personal situation and financial goals. It’s always important to compare different financial options and to consider seeking professional advice before making any changes to your finances.
Strugglers who are looking to quickly put together an emergency savings fund may want to prioritise high-interest savings accounts with low or no fees. That said, it’s also important to look at the terms and conditions for the account’s bonus rate, to work out if you’ll likely be in a position to maximise the interest you can earn on your savings.
Simplifiers and Opportunists who want to reassess their finances may also be interested in savings accounts with higher interest rates, which could be used to help protect money for use in the future. Services that can help track saving and spending could also be appreciated by those wanting to manage their money more smoothly. Some smartphone apps, such as Google Pay, Samsung Pay, or Apple Pay can be useful, and many banks have saving and spending trackers built into their own apps or internet banking options.