Generation Y Australians lend each other about $2.6 billion a year but have problems budgeting and saving, a survey says.
A survey of 1,000 Australians aged 18-29 years found 87 per cent of Generation Y used each other as an informal bank and exchanged money among themselves, St George Bank says.
St George has launched two complementary accounts – SENSE Everyday (for transactions) and SENSE Savings – that help customers to manage their money.
The bank’s managing director for Southern NSW and the Australian Capital Territory, Andrew Moore, said respondents with financial worries could benefit from St George’s new accounts.
“These people are likely to be 18 to 30 year olds who are starting out in their careers, or others who find it difficult to budget and save effectively, or the many people who are constantly balancing a household budget on one income,” Mr Moore said.
“Being able to set savings targets is another great tool to help motivate people who aren’t used to saving or budgeting, as they will be able to see clearly on their statements exactly how they are tracking in line with their targets.”
Nearly a quarter of respondents (24 per cent) said they had never budgeted or saved, while 36 per cent said they would consider themselves experienced at budgeting and saving.
Examples of Generation Y operating as an informal bank include 61 per cent of respondents who said they would buy dinner and/or drinks for their friends in the expectation they would be shouted the next time.
Another was lending cash to friends when they were out if someone needed a loan (52 per cent).
Also, 30 per cent said they would lend money to friends to cover their expenses until that person’s next pay day.
St George chief executive Greg Bartlett said the launch of SENSE would help account holders to handle their finances effectively.
“It also helps people to see exactly where their money is going each month,” Mr Bartlett said.
“For example, people may be surprised at how much of their money is spent on leisure or transport and can make simple changes like going to the movies on a Tuesday (when ticket prices are reduced) or using public transport instead of travelling by car.”
Respondents said they borrow and lend $31.92 a week on average among their friends, which leads to the estimated $2.6 billion exchanged between Generation Ys each year.