Holidays still top of the list for Australians despite cost-of-living worries: HSBC

However, despite these concerns Australians continue to focus on saving for holidays and luxury items.

According to Jessica Power, Head of International Wealth and Premier Banking for HSBC Australia, this latest research indicates a shift in financial priorities, potentially driven by the current economic climate.

“As housing affordability remains relatively unattainable for most Australians, especially young people, saving for a holiday or buying a small luxury item may be more attainable in the short term and allows people to live in the moment.”

“Interestingly the research found that almost half of Gen Z (45%) feel unprepared to handle a major unexpected expense, but in contrast 10% say they are saving to buy luxury items,” Power said.

Travelling habits

When it comes to saving for travel, 55% of Gen Z spent about the same or more of their money on travel and tourism in 2024, despite the cost-of-living crisis. Gen X travelled the least out of all generations in 2024, with 31% saying they spent $0 on travel and tourism.

In 2024, over half (53%) of Gen X said they spent less on eating out. 24% of Gen Z said they spent more on eating out – the highest of any generation.

Saving and spending trends

When looking at savings, approximately 1 in 4 Australians reported having less than $1000 saved, while 40% of Australians said they have up to $39,999 saved.

“With the cost of living continuing to be a concern, the research indicates that there is a big gap when it comes to amounts people are saving. A lack of savings is concerning particularly if people are faced with unexpected financial challenges such as medical bills or a job loss.

“The data showed some interesting findings when broken down by generation with 29% of Gen Z saving 20-100% of their monthly household income, the highest of any generation,” Power said.

ADDITIONAL STATISTICS

Financial goals

• 17% of Australians do not have any financial goals for 2025
• Top three financial goals for Australians in 2025
• Pay for a holiday (43%)
• Save for an emergency fund (32%)
• Pay off debt (including mortgage, HECs) (21%)

External factors impacting personal finances

• Younger Australians are most concerned with the cost of living (76%), housing affordability (50%), and cash rate (23%).
• Baby Boomers are concerned with the cost of living (68%), potential recession (27%), global political unrest (25%).

Spending and savings behaviours

• Almost 1 in 10 (8%) Australians have zero savings
• 18% of Australians are saving 0% of their monthly household income
• 57% of Gen Z and 50% of Gen Y use a bank app to track their financial goals
• 57% of women say the spent more money on groceries and 44% less on eating out over the past 12 months – indicating they are trying to make better financial decisions.

Credit card usage

• Only 58% of Australians use a credit card
• 24% of Australians have a credit card for reward points
• Only 14% of Australians have a credit card to build a good credit score
• Credit card usage is higher among older generations, males (vs. females), and higher affluent groups.