Savers’ secrets to success
Seepage spending is hitting Australians' hip pockets hard, with one in three admitting they don't pay much attention to where their money goes.
However, 70 per cent of Australians believe they are good at saving and are frugal with their money, while 30 per cent deem themselves to be spenders.
A new report, Project Payphoria, commissioned by accounting software firm Xero, quizzed 1000 Australians on whether they classified themselves as spenders or savers.
It found savers try to avoid financial strains and keep close track of their expenses, while spenders work hard and play hard - believing they should use their money now.
Tribeca Financial chief executive officer Ryan Watson said the secret to being a good saver came down to practising "conscious spending".
"Good savers are aware of the money they are spending," he said.
"They put thought into almost every purchase that they make.
"Good savers invariably have a goal and then a plan in order to achieve it."
The report says 73 per cent of men believe they are savers versus 67 per cent of women.
It also found long-term attitudes towards money were in stark contrast between savers and spenders.
Savers' main goals are to save for retirement and have an emergency fund, while spenders are focused on stashing cash for a holiday before building up an emergency fund.
Xero small business advocate Angus Capel said Australia was "an expensive place to live", which put immediate pressure on people's finances.
"If you want to save for a house it's going to potentially take a decade of saving up and it's hard to be able to get to that goal," he said.
Mr Capel said those who wanted to become better savers should "seek advice from someone you trust" and closely examine their spending habits.
The latest Reserve Bank of Australia statistics show many of us are saddled with credit card debt: $50.2 billion is owed on plastic and $30.6 billion is accruing interest.
Also booming are buy now, pay later schemes including Afterpay and Zip Pay, which allow customers to pay off items in instalments.
Users are hit with hefty charges if they fail to do this within the strict repayment guidelines. MORE NEWS
The Australian Securities and Investments Commission found transactions on these schemes grew from 50,000 in April 2016 to 1.9 million in June 2018.
And the total balance of outstanding debt on them nearly doubled from $476 million in April 2016 to more than $903 million by June 2018.
The Xero report also found 43 per cent of people believe their current lifestyle is more important than planning for their future.
And 45 per cent promise to be better with their money every month but it never happens.
ARE YOU A SPENDER OR SAVER?
• More likely to be female.
• In a defacto relationship.
• Children under 18 at home.
• Lives in a regional area.
• Less educated.
• More likely to be male.
• No children under 18 at home.
• Lives in a metro area.
• More educated.
Source: Payphoria report, 2019.