Almost one in three (31 percent) people in the UK said they are less stressed when they are saving regularly, suggesting that good saving habits can be a key driver for improving mental health.
A survey of 2,000 respondents found that people plan to use the time between Christmas and New Year to develop and adopt better saving habits. Nearly a quarter of British people (23 percent) said they identify as having a ‘frugal’ mindset when it comes to saving and spending.
Among people who don’t think of themselves as frugal, nearly nine in ten said they frequently used at least one regular money saving habit.
The Censuswide survey, conducted on behalf of HSBC, found these tactics included cancelling unused subscriptions (40 percent), skipping a takeaway (40 percent), not going out to pubs, bars and on nights out (37 percent) or for meals (34 percent) more than once a month, and ‘meal planning’ to reduce spend on office lunches (35 percent).
The survey found that the intention to develop good financial habits mean that almost four in ten said they’d considered using the services of a qualified financial advisor. This trend is most prevalent among younger people, with 47 percent of 18-24 year olds and 53 percent of 25-34 year olds.
Yo-yo and dipper savers
However, respondents did admit to behaviours that bedevilled achieving a regular savings habit. One in four (24 percent) 18-24 year olds admitted to ‘yo-yo spending’, a trend where periods of overspending are followed by a purchasing freeze that can include essentials. One in five (19 percent) 25-34 year olds also admitted to this habit.
‘Saving dippers’ was another key trend, which involved people saving a lump sum, which they then dip into once they’ve reached a certain amount. One in five (20 percent) of 18-24 year olds and nearly three in ten 25-34 year olds (29 percent) said they did this.
People aged 18-24 years olds were also twice more likely (17 percent vs 8 percent) than the national average to ‘doom spend’. This refers to people who live in the moment and do not prioritise saving for the future because they feel concerned about the current climate and future prospects.
However on the whole, most people reported positive habits and close to half (46 percent) were satisfied with their financial situation. The most common reasons to save were to set up a rainy day or emergency fund for 52 percent of respondents in the event of a loss of income, while planning for unexpected expenses (51 percent) and planned goals such as holidays, house renovations and events (39 percent) also key saving priorities. On average, people aimed to save 23 percent of their income.
Pella Frost, HSBC UK head of everyday banking, said: “The run-up to January is a great time to review your finances and set some goals for the year ahead.
“Planning your financial future can be easier if you start by mapping out your goals, whether that’s the holiday of a lifetime, or boosting your rainy-day fund. There are a number of tools people can use to support themselves with saving better, for example our Savings Goals feature, which helps customers make a plan and stick to regular saving habits and improve their financial resilience over the long-term.”
