In the current climate of fast-rising inflation and interest rates, 44% of Australians have lost their motivation to save, invest, or increase their income – a complacent behaviour that could put them at risk of falling behind with the rest of the population, a licensed financial adviser warned.
A Money.com.au-commissioned survey of 1,010 Australian adults found that 23% were less motivated to invest, 21% were less motivated to save, and 11% didn’t feel motivated to earn more at work in the current climate.
Surprisingly, a higher proportion of young Australians have lost their motivation to build wealth, with 53% of under-30s saying they don’t feel motivated to invest, save, or earn more at work, compared with 46% of 31-50-year-olds and 37% of over-50s who feel as unmotivated to build wealth.
“It is concerning that such a high percentage of the population have become complacent over building wealth,” said Helen Baker, licensed financial adviser and Money.com.au spokesperson. “Unfortunately, the risk with complacency is that they will form a habit to not save or invest and it can be difficult to get out of this complacency. Individuals will also fall behind on their financial goals as a result. The longer savings and assets fail to grow, the harder it will be to catch up.”
“It’s surprising to see that younger individuals aren’t focussed on building their wealth. They also risk falling behind those who are – and who will likely have better opportunities and funds for the future, such as for their retirement. In contrast, the return of immigration and a more competitive job market will prove challenging for those who have lost their motivation.”
The Money.com.au study also found a clue for the drop in motivation. Findings showed 59% of respondents believed inflation wouldn’t be controlled in Australia to its average 3% growth rate, with 61% of under-30s and 58% of over-30s not believing inflation would be controlled. Across the states, 66% of West Australians, 63% of Queenslanders, and 60% of Victorians indicated the same.
When asked if they have increased or decreased their spending this year, Money.com.au found that with lower motivation to build wealth, Australians were also less inclined to spend their money. Results showed that 35% spent less this year while 44% maintained their spending. Older Australians, in particular, saw their spending decline this year: 41% of over-50s, compared with 35% of 31-50-year-olds and 25% of under-30s.
“While it can take several months for rate rises to trickle into an individual’s spending, it is clear that the increases we saw earlier this year, combined with inflation, has led many Australians to re-think their spending,” Baker said. “Despite Australians indicating they are slowing their spending, we are approaching Christmas, a period when individuals tend to spend strongly, particularly on retail. I anticipate some households will increase their spending in the last two months of the year, and it is possible we will see a more pronounced decline early next year.”
