Goodbye smashed avo
COVID crisis is changing young adults from spenders to savvy savers
YOUNG adults have been among the biggest losers financially from the coronavirus pandemic, and the crisis looks to have changed their money mindset more than any other age group.
The Millennial generation and their successors, Generation Z, have become much more careful with their finances, much like the previous recession in the early 1990s shook Generation Xers.
And many face a tough battle in 2021 amid continuing underemployment, an increasingly casualised workforce and stagnant wages growth, money specialists and social researchers say.
A new study by YLab — the social enterprise arm of the Foundation for Young Australians — 89 Degrees East and Afterpay, has found a COVID-19 shift to conservative money attitudes, with 80 per cent of 18 to 39-year-olds now being careful about spending and believing that it was important to live within your means.
YLab executive director
Brigid Canny said young adults were more than twice as likely as other generations to have lost work during the pandemic, and were the majority of workers in pandemic-hit industries such as tourism, hospitality, retail and the arts.
“We have seen the smashed-avo generation myth busted, and instead are witnessing the emergence of a savvy generation making smart, mature decisions,” she said. “They’re actually more financially mature and cautious about money than they often get given credit for.
“Young Australians want to make good financial decisions.
“They are striving to do the right thing, and they are desperate for knowledge — but they can’t always see what ‘good’ looks like. Helping them build their financial resilience and literacy is crucial.”
Social researcher Mark McCrindle said the first Millennials — also called Generation Y — turned 40 in 2020, while the youngest were now aged 26.
Generation Z were born between 1995 and 2009, he said, and both generations had become more resilient during the pandemic, which had hit them the hardest financially.
“When you’re a bit older you can ride out the storms a bit more,” Mr McCrindle said.
COVID-19 delivered valuable financial lessons, he said.
“It builds a resilience and mindset that job security matters. I think we will end up with a generation that won’t be disparaged or seen as snowflakes not handling uncertainty.
“Generation X were the last generation that got their property early and moved ahead.
“The recession was key for them, and I think this one will be the same.”
Separate research by ridesharing service DiDi Australia has discovered a distinct shift in Millennials and Generation Zs to become active savers.
“We have noticed a greater balance. There is still going to be an understandable desire to travel, socialise and eat out, but (there is also) an awareness of searching for discounts and vouchers, as well as setting aside monthly income to savings, in order to secure financial health,” DiDi general manager Lyn Ma said.