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Side Hustles Or Spending Cuts? Survey Reveals How Gen Z, Y, And X Australians Tackle Inflation

Survey finds that Gen Z and Gen Y are taking on side hustles to maintain a wealthy lifestyle, not to cut spending

Australians are adapting to rising living costs in different ways, with significant differences in responses across generations, a recent Fidelity International survey shows.

The survey, which targeted Australians aged between 18 and 59, found that Gen Z and Gen Y were more likely to take on a side hustle than cut back on spending to maintain an affluent lifestyle.

On the other hand, the report shows that Generation X (ages 44 to 59) are drastically cutting back on non-essential spending in response to high living costs.

The study also found that for Gen Z, the top short-term concern is saving to buy a home or property (18%), followed by increasing investments (14%). In addition to these goals, they are also setting aside money for travel and lifestyle (11%) and settling debt (11%).

Meanwhile, Gen Y is more concerned about paying off debt (22%) and buying a home (17%). Emergency funds (12%) and achieving financial independence (10%) are also top priorities.

Gen Xers, on the other hand, are primarily focused on paying off debt (27%) and preparing for retirement (15%).

“Our research shows that younger Australians are financially ambitious, confident and – perhaps contrary to popular belief – more willing to take on extra work to support their lifestyle. This could include a side hustle, starting a business or a new investment opportunity. In contrast, Generation X Australians are more cautious and more likely to budget for themselves and cut back on non-essentials in response to the rising cost of living,” said Lauren Jackson, head of wholesale at Fidelity International Australia.

The survey noted that younger Australians, particularly Generation Z and Generation Y, are more confident about their finances. Financial stability enables them to confidently handle day-to-day and more general financial matters (around one in five feel very confident and half feel relatively secure). In addition, three in five said they are also confident in their ability to assess investment prospects.

The study also highlighted different generations’ investment preferences. While Gen X favors more traditional options like superannuation and Australian shares, Gen Y and Gen Z generally prefer investing in cryptocurrencies and passive ETFs. Additionally, a third of Gen Z and Gen Y respondents admitted that their risk tolerance is high or very high.

“Younger Australians (particularly Gen Z and Gen Y) have different expectations and priorities when it comes to financial management compared to older generations. They have access to multiple sources of information and often feel they are capable of taking advantage of investment opportunities, but this confidence can mask a lack of deeper financial knowledge and experience, particularly in areas such as portfolio diversification. A ‘get rich quick’ mentality can put young investors off track in achieving their financial goals, particularly with the ubiquity of cryptocurrencies and financial influencers. A strong focus on financial education, emphasising the importance of disciplined, long-term investing, will be key to ensuring their confidence does not lead to poor decisions,” Jackson said.

The study also found that Gen Z is more financially responsible, as evidenced by their habits of saving for the future, investing in real estate and paying down debt.

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