Frugal and proud of it: how ‘loud budgeting’ became cool
Australians under 30 are enthusiastically adopting ‘cash-conscious’ behaviour to grow their savings while interest rates are high
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Young Australians are embracing global ‘cash conscious’ trends popularised via social media to proudly cut back on increasingly expensive non-essential items, not only to cope with the cost-of-living crisis but also to prioritise saving and reduce debt while interest rates are high. A consumer sentiment survey conducted by National Australia Bank (NAB) revealed a 24 percent annual increase in the number of NAB Reward Saver accounts opened by Gen Z customers and an average 5.3 percent growth in their account balances over the past 12 months.
On average, NAB says their Gen Z customers are saving $450 per month by cutting back on spending, with 56 percent putting spare dollars into high interest savings accounts or mortgage offset accounts. Young people are saving an average of $124 per month by not eating at restaurants, $96 per month by not using food delivery services and $73 per month by skipping coffees, snacks and café lunches. They are also saving an average of $70 per month on petrol by using their cars less frequently, $64 per month by foregoing entertainment and $30 per month by quitting streaming services.
NAB Personal Banking executive Paul Riley said: “In 2024, being ‘cash conscious’ is officially cool … ‘Loud budgeting’ is all about unapologetically prioritising your own financial goals, setting smart boundaries on spending, and feeling comfortable to talk about it openly and authentically. Rather than going out for an expensive dinner with friends, younger Australians are confidently opting to stay in and choose to put that amount into a high interest savings account or pay down debt.
“The other hot budgeting trend is ‘no or low spending months’ which involve giving up alcohol, takeaway food or shopping for clothes or beauty for the month, not booking holidays, food prepping or bringing your lunch to work or finally asking mates to repay cash you’re owed,” Mr Riley said.
Maya McIntyre, 23, is putting an extra $250 into a high interest savings account each month.
“I’m definitely making some changes to what I’m spending money on and I’ve cut back on things like streaming subscriptions, I’m eating out less and I’m choosing cheaper or free things to do with friends rather than expensive meals and pub visits,” Ms McIntyre said. “Most of my friends are making some changes to the way we think about our finances and some of us are definitely more open to saying ‘no’ to things if we feel like we want to save money instead.”
Since mid-2023, NAB has seen a 62 percent increase in the number of customers using its personalised spending feature available on the NAB app and internet banking. This automatically categorises transaction data to help customers easily identify where their money is going. Categories include subscriptions, memberships, gym and health, insurance and supermarket spending.
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For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs.
1. Full-Doc Loan
A full-doc loan is the most straightforward and competitive option for self-employed borrowers with up-to-date tax returns and financials. Lenders assess two years of tax returns, assessment notices, and business financials. This type of loan offers high borrowing capacity, access to features like offset accounts and redraw facilities, and fixed and variable rate choices.
2. Low-Doc Loan
Low-doc loans are designed for borrowers who can’t provide the usual financial documentation, such as those in start-up mode or recently expanded businesses. Instead of full tax returns, lenders accept alternatives like profit and loss statements or accountant’s declarations. While rates may be slightly higher, these loans make finance accessible where banks might otherwise decline.
3. Standard Variable Rate Loan
A standard variable loan moves with the market and offers flexibility in repayments, extra contributions, and redraw options. It’s ideal for borrowers who want to manage repayments actively or pay off their loans faster when income permits. With access to over 40 lenders, brokers can help match borrowers with a variable product suited to their financial strategy.
4. Fixed Rate Loan
A fixed-rate loan offers repayment certainty over a set term—typically one to five years. It’s popular with borrowers seeking predictability, especially in volatile rate environments. While fixed loans offer fewer flexible features, their stability can be valuable for budgeting and cash flow planning.
5. Split Loan
A split loan combines fixed and variable portions, giving borrowers the security of a fixed rate on part of the loan and the flexibility of a variable rate on the other. This structure benefits self-employed clients with irregular income, allowing them to lock in part of their repayment while keeping some funds accessible.
6. Construction Loan
Construction loans release funds in stages aligned with the building process, from the initial slab to completion. These loans suit clients building a new home or undertaking major renovations. Most lenders offer interest-only repayments during construction, switching to principal-and-interest after the build. Managing timelines and approvals is key to a smooth experience.
7. Interest-Only Loan
Interest-only loans allow borrowers to pay just the interest portion of the loan for a set period, preserving cash flow. This structure is often used during growth phases in business or for investment purposes. After the interest-only period, the loan typically converts to principal-and-interest repayments.
8. Offset Home Loan
An offset home loan links your savings account to your mortgage, reducing the interest charged on the loan. For self-employed borrowers with fluctuating income, it’s a valuable tool for managing cash flow while still reducing interest and accelerating loan repayment. The funds remain accessible, offering both flexibility and efficiency.
Red Door Financial Group is a Melbourne-based brokerage firm that offers personalised financial solutions for residential, commercial, and business lending.
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