Andy Kerr University Students More Saving Savvy Than Previous Generations Interview
With more than 20,000 university students across Australia expected to descend on university campuses for Orientation week (O-Week); Westpac has released new research which suggests university students today are more in control of their finances than previous generations, and are becoming better savers.
The Westpac Campus Trends Report revealed that the majority of students (60 per cent) are saving an average of $353 every month, and three quarters (75 per cent) believe they will reach their future financial goals for the next three years. Their top priorities are saving money (69 per cent), saving for a holiday (49 per cent), buying a car (38 per cent) and buying their first home (25 per cent).
Westpac's Head of Everyday Banking Andy Kerr said: 'It's great to see students are taking control of their money and saving for big things like overseas holidays. We know travel is the top savings priority, and we want to support them in their travels. At Westpac we offer the Westpac Choice Account with free access to more than 50,000 ATMs through the Global Alliance. This could save hundreds of dollars on a trip overseas," said Mr Kerr.
Today's students are also turning to technology to monitor their savings, with 62 per cent regularly tracking expenses online via their bank's website (49 per cent) or mobile banking app (48 per cent). University students also look for convenience when it comes to their payment methods, with 69 per preferring to use their debit or EFTPOS card as their main form of payment, followed by cash at 60 per cent.
'New technologies such as mobile and online banking are allowing students to take control of their finances from an early age. Although there is still a strong preference amongst this age group to use their debit card when paying for everyday items, cash is still high on their radar. Westpac's Get Cash is one of the ways we're giving students access to their cash 24/7, even when they don't have their debit card," added Mr Kerr.
The report also revealed that university students today are less likely to regularly borrow money from their parents than previous generations, with only 18 per cent admitting to regularly borrowing money, compared to 35 per cent of past university students. Students are also living at home longer, with the average age to leave home now at 23 years old, compared to 21.5 years for previous generations. 'It's also interesting to note that despite saving more and spending less than previous generations, only one in three university students have a high interest savings account to really maximise their money. Westpac has a range of financial products and options to help university students, like our Reward Saver for up to 21 year olds or the Choice Account which has no monthly account-keeping fees for students," said Mr Kerr.
With 39 per cent of students stating overseas travel is their number one savings priority, Westpac is giving students a chance to realise their travel aspirations, with two $10,000 travel experiences up for grabs. To enter, students are being encouraged to visit the Westpac stands at select universities around Australia during O-Week.
For more information on Westpac's involvement in O-Week, please visit: westpac.com.au/unstoppableyoucomp
For further information on Westpac products and services specifically developed for students, please visit: www.westpac.com.au/
Interview with Andy Kerr, Head of Everyday Banking Westpac
Question: What surprised you most about the findings of The Westpac Campus Trends Report?
Andy Kerr: The report busts some commonly held myths, showing that students are taking control of their finances and saving over $350 per month. The report revealed that students are saving for bigger items like overseas travel and a home deposit. Despite this focus, only one in three students have a high interest savings account to maximise their savings.
Question: Why do you think students nowadays are better savers than those who studied 10-30 years ago?
Andy Kerr: One key trend that is likely to contribute is that today's university students are leaving home at a later age than in the past, with the average being 23.2 years, compared to 21.5 years historically. This extra time at home clearly allows students to save money. Also recent advances in technology and new online banking platforms are having an impact as they are allowing students to check their accounts in one place and on the go, so they're more in control than ever before. The recently launched fingerprint logon on the Westpac Mobile Banking app makes it faster than ever to check what's going on with your money.
Question: Why is it important for Westpac to provide the Campus Trends Report?
Andy Kerr: We commissioned research that would tell us more about the financial mindset of young Australians so that we could better understand their needs and ensure we're offering the best services to meet them.
Question: Is there a reason as to why 66% of females putting money aside as savings each month compared to only 53% of males?
Andy Kerr: Our research found that female students are more likely to use an app to track their spending (53%) compared to males (40%) which could suggest that they are more in control of their daily finances. In addition, female students are paying less for their top five expenses each month than their male student counterparts which could contribute to why they are saving more.
Question: Is it important for students to track how and where they spend their money?
Andy Kerr: Mobile and online banking allows students to take control and have greater visibility of their finances from an early age. These new platforms encourages students to become more aware of their spending habits and as a result, better at managing their finances.
Question: How can we all work towards buying a home?
Andy Kerr: There are a number of things to consider when you have decided to buy your first home. Research and preparation are very important as it can be a daunting experience. To save for a home deposit, work out a budget so you know how much money you can put toward this goal and how long it will take. This is a great way to also get into the habit of allocating funds for potential home loan repayments in future knowing you will still have enough funds to pay for everyday expenses. Cutting back on the little things can make a big difference, such as walking to work instead of catching the bus or cutting out takeaway coffee during the working week. Small changes in the short term can make a big difference in the long run.
Question: Why do you think the average age for leaving home has increased?
Andy Kerr: Leaving home later than previous generations, students have more time to stabilise and maintain their finances. Many respondents are also working, whether it's full time or part time, whilst living at home which is allowing them to accumulate savings without having to pay rent or presumably for basic utilities such as food and household expenses.
Question: Can you talk us through high interest savings accounts?
Andy Kerr: Westpac has a competitive interest savings account called the Westpac eSaver which allows customers to earn interest on their savings while having access to their funds 24/7.The Westpac eSaver offers a competitive interest rate with no monthly service fee for students. For students who open a new Westpac eSaver account, they will receive an introductory fixed bonus interest in addition to the standard variable interest for the first three months .
Question: Why would a high interest savings account be good for a student?
Andy Kerr: The Westpac eSaver account enables students that are keen to save for a goal, an opportunity to maximise their savings by earning a higher amount of interest on these savings as compared to the everyday transaction account. The Westpac eSaver account enables students to deposits funds, whilst discouraging withdrawals to encourage them to achieve their saving goals.
Question: What apps do you suggest to track spending?
Andy Kerr: Your banks' mobile banking app is a great start to tracking your spending day to day. Westpac Live, Westpac's mobile and online banking platform, helps consumers understand their financial situation no matter where they are. Westpac Live allows customers to view up to three years' of transaction history and get a running balance on accounts as well as see all of their assets and liabilities in one location. The new fingerprint logon makes it faster than ever to see what's happening with your money
Interview by Brooke Hunter