New research released today by Commonwealth Bank (CBA) shows nearly nine in ten (88%) Australian millennials (aged 25-35) say they make sacrifices to their lifestyle to afford larger purchases of up to $1,000.
The CommBank study explores millennial purchasing decisions and habits to understand what purchases they prioritise, delay or put off.
Findings from the study reveal while many Millennials have good savings habits, there is an emerging behaviour of ‘sidestepping’ – the act of putting off the payment of a necessary everyday item or expense.
CBA’s General Manager, Caleb Reeves says: “Juggling money can be one of the more challenging skills we all manage on a day-to-day basis. While Millennials work hard to find the balance and are sensible with money overall, we can see they still need to navigate competing choices and priorities.”
According to the research, the most common reasons why young Australians delay paying for everyday items include:
- An unexpected expense came up that meant they had to make a sacrifice (59 per cent)
- Never having enough money left over to cover all the little expenses (28 per cent)
- Because they feel everyday items are not as urgent (28 per cent)
- Everyday items are mundane and they don’t get any enjoyment from them (25 per cent)
- They spent their money on a large purchase that they got a great deal on (21 per cent)
- Going out with friends took financial priority (17 per cent)
Interestingly, the research found the vast majority of young Aussies (65 per cent) have delayed paying for everyday or essential items at one point or another.
The top everyday items / essential expenses that millennials are forgoing or ‘sidestepping’ are:
- New shoes when needed (59 per cent)
- Household items (43 per cent)
- Fixing their cracked phone screen (41 per cent)
- Getting their car serviced (27 per cent)
And while 65 per cent of young Aussies admitted to putting their essential expenses on pause, 44 per cent said they put these expenses on hold in order to make a more ‘exciting purchase’.
These exciting purchases included:
- New technology (52 per cent)
- Experiences such as concerts and festivals (44 per cent)
- New or repairs to existing household items / furniture (40 per cent)
- Clothing, shoes and accessories (39 per cent)
- Socialising / dining out (35 per cent)
To help provide Aussies with extra cashflow so that they don’t have to put essential expenses on hold, CommBank has introduced StepPay – its buy now, pay later offering. StepPay can help eligible customers access cashflow, smooth payments and avoid sidestepping.
With StepPay, Australians can access up to $1,000 credit. StepPay has no interest or ongoing fees and can be used anywhere CBA cards are accepted.
“We’ll always need to juggle payments and expenses, but there are options available to provide extra cashflow and better manage payments,” Mr Reeves says.
Detailed findings of Millennials surveyed includes:
- Almost nine in ten (88 per cent) young Australians 25-35 years of age say they make sacrifices to their lifestyle in order to afford large purchases of up to $1,000.
- For four in ten (39 per cent) young Australians 25-35 say these sacrifices occur monthly or more often, with almost one in five (18 per cent) doing this every week. A further one in five (22 per cent) make these sacrifices for larger purchases every 2-6 months; 7 per cent every 7-12 months; 4 per cent every 1-5 years; and 16 per cent less often.
- Men (42 per cent) are more likely than women (35 per cent) to make sacrifices to their lifestyle in order to afford a large purchase of up to $1,000 monthly or more often.
- Young Australians are most likely to prioritise groceries (79 per cent), paying their electricity bill (71 per cent) and getting their car serviced (46 per cent) amongst their everyday expenses.
- Those aged 30-35 years (48 per cent) are more likely than those 25-29 years (38 per cent) to say they are happy to sidestep buying an everyday item so they can afford a more exciting purchase.