- Many CHOICE members are fearful about the quality of life they’ll be able to afford in retirement. Some are staying in the workforce longer than anticipated and revising their retirement plans.
- Saving more, spending less and getting value from every purchase are high on the agenda.
It’s been a traumatic time for financial markets and the wider economy, with the world experiencing its deepest and most synchronised recession in 70 years. And while Australia has so far been spared the very worst effects of the global financial crisis, consumers have seen the value of their retirement savings plummet, share portfolios smashed, property prices stagnate and unemployment rise.
Confidence has been shaken, which is having a discernible effect on our everyday lives, with fears about meeting the cost of living in retirement, maintaining employment and keeping up with mortgage repayments front of mind for many people.
In March, CHOICE surveyed more than 2000 magazine and online members to find out how they’re managing the downturn.
Please note: this information was current as of June 2009 but is still a useful guide to today's market..
A return to lost values
A common theme throughout responses was the need to return to old-fashioned values of saving and thrift, and a rejection of what some see as a wasteful, throwaway society that relies too much on credit. However, for many members this isn’t really a change at all, as they were already careful and considered with their money. Some members commented:
- “I can’t fathom the ‘spend, spend, spend’ ethos.”
- “My natural instinct is to save for what is becoming a stormy rather than a rainy day.”
- “I grew up in an era when apart from borrowing to buy a house, one had to save to buy other big-ticket items and was ultimately rewarded with a sense of achievement. This seems to be entirely lacking in today’s culture of instant gratification and consequential debt.”
There’s plenty of confusion and anger over the federal government’s cash handouts too, which many members see as perpetuating the problems of over-consumption and consumerism. Some members said:
- “Encouragement to spend is stupid when you have less to spend.”
- “We should be teaching people to be frugal again and to seriously revalue their lifestyle.”
- “[I am] concerned by all these stimulus packages. I don’t recall this sort of thing during the last recession; people just worked through the tough times and eventually things got better.”
She’ll be right …
Most of CHOICE’s members have lived through recessions in the past. While there’s a lot of concern and uncertainty, many retain a general sense of optimism about the future, believing they’ll weather the global financial storm. “My father taught me that decent shares will recover, which I put a lot of faith in as he survived the 1930s depression,” said one member. Others believe “in the resilience of the Australian economy” and that “people who survive the next two or three years will be fine in the longer term”.
In the coming months we will be addressing some of the issues raised through your comments and feedback.