Savings by age
Minutes to read: 6 minutes
Minutes to read: 6 minutes
We all have our own dreams or things that we want, no matter how old we are. Most of us need to save our money to make those dreams and goals a reality.
While both these statements are true, it might be good to know where we stand with our goals, dreams and savings compared to other people our own age.
We have discovered that on average a Westpac group customer holds $22,020 in their transaction, savings and term deposit accounts as at the 31st December 20201. This figure is skewed by some large deposit holders.
The more realistic figure is around $3,559 being the average for the median band of between $500 and $20,000. This means 50% of our customers may have more than $3,559 and 50% have less than this.
But what about your age group? As you can see in the below graph, as people grow older their average and median account balances increase.
Average or mean is an estimate of the expected or usual number for a range of numbers. It is calculated by adding up all the values in a range of numbers and dividing it by the number of values in the same range. If there are a few very large numbers or small numbers they can give a misleading result.
Median is the number attributable to the middle value in a range. It is calculated by ordering all the values in a range from highest value to lowest value and then selecting the value in the middle. It may give a more realistic figure than an average
Your account balances may not look the same as this. You may be in a different financial position and may have very different dreams and goals.
However, no matter what your position, saving (even a small amount) will help you get what you want out of life and help you to feel in control of your money.
We have taken inspiration from available data at Westpac to give you an idea of the broad savings goals for each age grouping. Both the Westpac Life and Bump accounts allow you to name up to six goals and can help you determine how much you need to regularly save to reach each of your goals by a certain date.
Westpac Bump account holders (under 18's) typically create their own custom goals (labelled "Other" in the graphs). “Education” is the goal which account holders collectively have the most money saved towards, closely followed by “Future Home”.
These are foundational years for building good money habits. Learn more about money by doing a financial fitness course or visiting Westpac’s “Get serious about saving” page. You can also set up your own savings account and personalised goals here.
Custom labels (“Other”) are still the most popular category for this group, followed by “Home & property” then by “Holidays and travel”.
13% of this age group are putting money aside in a “Just in case” goal. While planning out our life and our goals gives us a better chance of achieving them, the universe sometimes has other ideas and will throw a curve ball like the car breaking down or losing our job. Most advisors recommend a savings target of 3 to 6 months of your regular expenses. Learn more about money by doing a financial fitness course or visiting Westpac’s “Get serious about saving” page.
“Home and property”, while still second, has become more important with a greater proportion of people setting this goal and the average balances being higher. If buying a property is high on your list, do your research, talk to a home finance banker or seek information from Westpac’s Davidson Institute. To help you save a deposit visit Westpac’s “Get serious about saving” page.
The custom label category (“Other”) has grown a bit more in popularity which may reflect those who have got into the home they want and are now looking at other goals. However, many are still saving towards “Home & property” possibly to buy their first home, renovate the home they have or maybe find a bigger home to accommodate their changing life and maybe a bigger family. Whatever your life goals are at this stage, it pays to keep saving and learning. Refresh your knowledge and skills by undertaking a financial fitness course or visiting Westpac’s “Get serious about saving” page.
The significant shift is that “Holidays and travel” has sprung into second place. For many, finances may become a bit easier, and other goals such as overseas holidays or exploring locally might become front of mind. And when it is OK to travel overseas again, those who are saving will have the opportunity to do so. If you are saving for travel, consider having a look at Westpac’s “Travel & Holidays” page as well as Westpac’s "Get serious about saving” page.
“Holidays and travel” remains the second most desirable goal, but cautiousness appears to grow, as the “Just in case” goal has moved into third place for popularity. This may be a case of “older and wiser” having seen the amount of unplanned expenses life can throw at us.
Depending on where you are at financially, you may get benefit from Westpac’s “Get serious about saving” page or be interested in Planning your finances for retirement.
Cautiousness prevails with “Just in case” becoming second most popular goal. “Holidays and travel” drop a place to third, although the average balance has grown compared to 55 to 64 year old’s.
If you are over 80 that is fantastic, we hope your health and other life events are treating you well and you continue to realise your financial dreams and goals.
While saving for “Just in case” has taken over first place, “Holidays & travel” and “Home and property” are still important.
It does not matter what age you are, everybody has dreams and goals that may require saving for.
If you are behind the averages or medians, it may mean you have achieved your goals and spent the money, which is fantastic. And remember, it is never too late to learn good money habits and save for the things you want out of life.
By setting your goals, separating your savings into a different account to your everyday spending and setting up recurring payments, you may find beating the averages easier than you think. Have a look at some more hints and tips on Westpac’s “Get serious about saving” page.
Written by Westpac's financial education specialists, the Davidson Institute.
1. All numbers are as at the 31st December 2020 and relate to Westpac group customers (Westpac, St George, Bank of Melbourne and Bank of South Australia), who are over 18, regularly deposit into an account and regularly transact and have a transaction account, savings account or Term deposit.
2. All numbers as at 30th September 2020 and relate to Westpac customers holding a Westpac Life or Westpac Bump account.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness or the information to your own circumstances and, if necessary, seek appropriate professional advice.
© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
© St.George Bank - A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
© BankSA- A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
© Bank of Melbourne - A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.