The latest Gen Z trends? Saving and budgeting

As inflation and the cost of living put the squeeze on more Australian budgets, one generation is actively taking steps to save money and stay ahead of the curve. But how effective could these strategies be for reaching your savings goals?

According to new survey results released by NAB, more than half (56%) of Gen Z and younger Australians are using the money they’re saving from cutting back on non-essentials to stash into their savings accounts instead.

Cutting costs and stashing cash

Based on data from the NAB Economics Q4 Consumer Sentiment survey of around 2000 Australians, Australians under 30 are saving more than $450 each month by cutting back on increasingly expensive non-essentials, such as: 

• eating out at restaurants ($124);
• micro treats like coffees, snacks and lunches out ($73);
• entertainment ($64);
• car journeys to save on petrol ($70);
• food delivery services ($96), and;
• streaming services ($30). 

NAB Personal Banking executive, Paul Riley, partially attributed these findings to Gen Z embracing certain ‘cash conscious’ trends that are proving popular on platforms like TikTok: 

“‘Loud budgeting’ is all about unapologetically prioritising your own financial goals, setting smart boundaries on spending, and feeling comfortable to talk about it openly and authentically.”

“The other hot budgeting trend is ‘no or low spending months’ which involve giving up alcohol, takeaway food or shopping for clothes or beauty for the month, not booking holidays, food prepping or bringing your lunch to work or finally asking mates to repay cash you’re owed.”

According to NAB, the number of high interest savings accounts opened by Gen Z NAB customers has grown 24% over the last year and savings account balances belonging to this cohort have increased by 5.3%.

Crunching the numbers: how a savings account works

For example, according to RateCity’s Savings Account Calculator, if a saver opened a new savings account with a 5% interest rate and an initial balance of $450, then made monthly $450 deposits for one year, they could end the year with a balance of $5999, having earned $149 in interest. Keep in mind that this example doesn't include fees or other costs, and is for illustrative purposes only.

Keep in mind that the savings accounts offering the highest interest rates often have strict terms and conditions. For example, to earn the higher bonus interest rate on a savings account, you may need to:

• make a minimum number of deposits per month;
• deposit a minimum amount into the account each month;
• make no withdrawals, or;
• make a minimum number of transactions using a linked bank account.

Some savings accounts may only offer a higher interest rate for an initial introductory period of a few months, before reverting to a lower ongoing savings rate. 

Before you contact your current bank, consider comparing some savings account options from other Authorised Deposit-taking Institutions (ADIs) to see if there is an account that better suits your financial situation and personal goals.

Compare savings accounts