Consumers tighten purse strings as crisis continues

Tasmanian banking group MyState Bank surveyed more than 1,000 consumers about their financial resolutions for 2021, and found that 48 per cent wanted to rein in spending on luxury items over the next six months.

The research also revealed that nearly 30 per cent of consumers wanted to start and maintain a budget for themselves in the new year, while 20 per cent wanted to pay their mortgage off faster.

MyState general manager customer experience Heather McGovern said despite the negative emotional and economic impacts consumers had felt as a result of COVID-19 in 2020, a positive many had taken out of the crisis was better engagement with their finances.

“One of the silver linings during this period is how the pandemic has encouraged consumers to review their spending habits with the end goal of better money management,” Ms McGovern said.

“The pandemic has profoundly altered the daily lives of Australians, ushering in a new-found respect for the benefits of savings.”

The survey showed a significant proportion of consumers were still concerned about the long-term economic impacts of the crisis, with 44 per cent saying they were worried about Australia’s economic outlook.

A further 35 per cent said they were concerned about not having enough savings, while 25 per cent said they were still worried about their jobs.

With renewed outbreaks having closed many state borders over the Christmas period, 50 per cent of survey respondents said they were planning to spend less on travel over the next six months.

A large proportion of consumers also expected to continue working from home, with 44 per cent saying they would spend less on public transport in the coming months.