Australians choose financial independence over buying a home
Homeownership is slipping down Australians’ list of financial priorities as people choose to pay for their dream lifestyle rather than their dream home.
According to Insignia Financial’s Financial Freedom Report, more than half of Australians (55 percent) list financial independence as their number one priority.
Financial freedom is defined as having enough passive income (whether from a business, investments or savings) to cover your daily expenses and give you “the freedom to achieve your ideal life and no longer have to work as an employee”, said the University of Gianna Thomson of Canberra.
Australians have also reaffirmed their desire to travel after being confined during the pandemic, with half of those surveyed saying they prioritize taking regular holidays.
Owning a home is now on par with having a good work-life balance in terms of priorities, with 45 percent of respondents saying this was their biggest aspiration.
According to Renato Mota, Chief Financial Officer of Insignia, the shift in priorities has come at a time when the impact of Covid-19 and increased cost-of-living pressures have changed people’s short-term behavior.
“It is clear that Australians have shifted their life priorities from the traditional dream of owning a home to living their dream lifestyle, which is under pressure from the current economic climate,” he said.
“Australians are deeply aware of their financial well-being as it ultimately enables them to achieve the things that matter most to them, whether that be traveling or spending time with loved ones.”
Shockingly, the highest aspiration is very different between different age groups, with each generation having different aspirations.
Faced with record high house prices, 63 percent of Gen Z (ages 13-27) cite owning their own home as their top financial priority.
More than half (54 percent) of Generation Y (aged 28-42) say their biggest ambition is a good work-life balance.
Meanwhile, older Gen X (43-57 years old) and Boomers (58-76 years old) Australians are more likely to strive for financial independence than to own a home and live a balanced life.
And for those in twilight, more than half say taking regular vacations is the most important thing to them.
With the cost of living crisis eating into Australian wage packages, there is a greater need for improved financial literacy.
One in five (22 percent) say they are not at all satisfied with their financial situation and more than half (55 percent) are only somewhat/somewhat satisfied with their financial situation.
To remedy this, 58 percent want to manage their money better and 63 percent are putting more time and energy into increasing their financial knowledge than a year ago.