Almost 50% of Australians have lost motivation to save or invest

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Almost half of people surveyed about their finances said they have lost their motivation to save, invest or increase their income.

A survey of 1,010 Australian adults, commissioned by Australian finance platform and comparison website Money.com.au, found that 44% of respondents had lost motivation when it came to building wealth.

The report also revealed that 59% believe inflation will not be controlled in Australia and won’t return to its average 3% growth rate. Overall, 23%  were less motivated to invest, 21% less motivated to save and 11% don’t feel motivated to earn more at work.

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A higher proportion of young Australians have lost their motivation to build wealth, with 53% of respondents under 30 admitting they don’t feel motivated to invest, save or earn more at work, compared with 46% of 31- to 50-year-olds and 37% of over-50s. 

Money.com.au financial adviser Helen Baker (pictured above) said this complacency could put many people at risk of falling behind the rest of the population.

“It is concerning that such a high percentage of the population have become complacent over building wealth,” Baker said.

“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 mindset. 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.”

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Baker said it was surprising to see that younger individuals weren’t focused 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,” she said.

Baker said Australians shared growing concerns that inflation would not be controlled in Australia.

“Similar proportions of respondents across all age groups and states and territories don’t believe the government or RBA will control inflation to normal rates,” she said.

“Sixty-one per cent of under-30s and 58% of over-30s do not think inflation will be controlled. Meanwhile, across the states, 66% of West Australians, 63% of Queenslanders and 60% of Victorians indicated the same.”

Baker said Money.com.au also asked survey respondents if they had increased or decreased their spending in 2022, with the results finding 35% had decreased spending this year.

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“We found 44% have maintained their spending, with older Australians in particular decreasing their spending, compared with 35% of 31- to 50-year-olds and 25% of under-30s,” she said. “This echoes recent data which found household spending had slowed in September by decreasing 0.5% – the first fall to occur since April when interest rates began increasing.”

Baker said while it could take several months for rate rises to trickle into an individual’s spending, it was clear the increases to the cash rate earlier this year, combined with inflation, had led many to rethink their spending.

“The RBA’s 0.25% cash rate increases in October and November have sent a clue to the population that they might not be able to control inflation – or that the inflationary period will last years,” she said.

“Experts predict that inflation will peak to 7.75% in the December 2022 quarter, but that depends on what you spend your money on. 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.” 

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