As we go through life, our goals and aspirations change. With each passing decade, we have different ideas about what we should aim for and aspire to. It should come as no surprise to learn our savings goals are likely to change too.
A recent survey into the savings habits and goals of millennials, conducted by the Top Cash Back website, has revealed that saving for the deposit on a home is far from the most important savings goal. Indeed, the results reveal this goal is fifth on their list of goals.
An emergency fund is most important
We’re often told we should squirrel away three months’ worth of income in case we lose our jobs. That advice is clearly being taken in by the millennials, 1,460 of whom responded to the survey. 51% said this was their main goal. A further 43% said they wanted a savings cushion, while 40% save each month to achieve financial freedom. Fourth on the list, 37% of millennials save to allow them to travel and enjoy regular holidays. Only 35% of them said their most important goal was to save for a deposit on a house.
95% want to buy a property at some stage
The survey also revealed almost all those taking part wanted to own their own home at some point, with 95% responding positively to this question. However, 31% believe it won’t happen, with a further 29% saying they were ‘hopeful’. Only 39% said they were certain they would eventually buy a property of their own.
Two-thirds of those responding were worried above costs rising faster than they can save
64% said they were concerned the cost of property was rising far more quickly than salaries, making it far harder to save for the required deposit, or to afford the purchase price.
“It’s clear many younger people are keen on making the most of their life experiences at this stage,” said Darren Pescod, CEO of The Mortgage Broker Limited, upon reviewing the data. “Another concern that arose was that day-to-day living costs make it far harder to save a decent amount towards a deposit. While some young people may be happy to rent and save for other experiences first – such as travel – it is still important to save towards a deposit as soon as possible. Leaving it until later means it can take far longer to save enough to make home ownership a possibility.
“With stricter requirements in place for granting mortgages, it also makes sense to show sensible saving and financial management habits early on. It could make a difference later when it does come to applying for a mortgage.”
It’s good to know millennials are taking the task of saving money seriously. However, for many, it may be some time yet before the idea of saving for and owning their own home becomes a reality. This survey shows other more immediate experiences are proving more important at present.
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