In a shift reflecting greater financial prudence, Australians have significantly cut back on travel, leading to considerable monthly savings.
New data from NAB highlighted that 45% of Australians have altered their travel plans in the first quarter of 2024, favouring local destinations over international journeys and lavish trips.
The change is boosting their savings by an average of $528 a month, a 39% increase compared to the last quarter of 2023.
“Australians are prioritising essential costs and boosting savings by choosing to postpone, slim down, or cancel travel plans this year,” Paul Riley (pictured above), NAB’s executive of personal everyday banking, said in a media release.
The savings impact varies among different age groups, with millennials saving the most at about $743 monthly, significantly higher than other groups. This is followed by the 50-64 age group, who saved $645 per month. The older demographic, those 65 and above, and Gen Z saw lower but still substantial savings of $440 and $329 respectively.
These savings are primarily being redirected towards covering more expensive everyday items, enhancing savings or offset accounts, and paying down mortgages. Gen Z, in particular, is likely to channel their extra funds into savings, with 56% opting for this approach, NAB reported.
The data also revealed a broader trend of careful financial management, with Australians increasingly opting for local travel alternatives or smaller vacations.
“For some, it might mean switching the Amalfi Coast for the Sunshine Coast, for others swapping an interstate break for a city staycation,” Riley said.
This cautious approach is not just limited to travel but extends to other areas of expenditure like dining and entertainment. According to Riley, this is part of a broader “loud budgeting” trend, where people openly set and communicate financial boundaries with peers and family, enhancing their budget management.
Looking ahead, the trend is expected to persist, with one in four Australians indicating they are likely to reduce travel spending over the next 12 months, NAB reported.
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