March 30, 2023 Emily Ryan

It turns out Millennials are financially savvy after all…

A recent University of Sydney study has explored the myth around Millennials being a group of indulgent spenders who sacrifice their ability to save towards purchasing their first home because they cannot go without their smashed avo on toast.

Researchers at The University of Sydney have completed a research project titled “Pathways to home ownership in an age of uncertainty”, undertaken for the Australian Housing and Urban Research Institute (AHUIR).  The research examines how young householders aged 25-34 in Sydney and Perth are adapting their living arrangements, spending and saving behaviours to be able to buy a home.

Traditionally, people in the 25 to 34 age bracket would be ready to purchase, or have already purchased, their first home.  The study found that approximately 40% of respondents in Sydney and 47% in Perth have already become homeowners.  When comparing the current Millenials against Generation X, recorded at 62% and Baby Boomers, recorded at 66%, you can see that home ownership is not being achieved at the same level it has in the past.

Furthermore, the survey provided financial diaries to 20 households to explore the complexities of spending and saving habits within this age bracket.  Dr Troy, Senior Lecturer in Urbanism at the Sydney School of Architecture, Design and Planning stated “The diaries confirmed that young adults are actively using strategies to support saving, such as minimising discretionary spending and paying ahead on utility bills.   They’re not spending much on eating out, entertainment or going on holidays, with the most common saving strategies being cooking at home – including relying on meals of 2-minute noodles! – and spending less on clothing and household items.  Instead, young adults are focused on paying reoccurring items such as food, petrol and debts, with the biggest challenges being the large, irregular, and often unexpected, expenditures such as car repairs and professional insurances”.

Acknowledging that past generations have also faced challenges, it is clear there will be a shift for the current, and likely future, generations in the way they grow and hold their wealth.  For some, a large percentage of their wealth may no longer be held within the family home.  While that idea may buck the long held thinking of older generations, this does not make the situation a doom and gloom forecast.  The positive message found in this survey is the level of financial goal setting and the display of dedication and discipline applied to build savings.  At Income Solutions, we believe the ability to set and achieve financial goals is paramount to building a financially secure future.  A financially secure future is achievable regardless of your home owner status, and the sooner you start, the greater the possibilities.  To understand more, request a copy of our Common Sense Investing webinar, or request an obligation free meeting with one of our Financial Advisers.

 

https://www.sydney.edu.au/news-opinion/news/2023/03/21/smashing-the-avocado-myth–cutting-brunch-won-t-pay-home-deposit.html

https://www.ahuri.edu.au/research/final-reports/395

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