Sydney, June 27: As the end of the financial year approaches, new research from digital bank ubank shows that Gen Z and Millennials are keen to improve their financial knowledge, particularly in tax planning and optimisation.
The survey of 1,311 adults aged 18 to 43 found that 86 percent want to enhance their financial literacy, with a third specifically interested in understanding taxes better.
“Similar to what’s reflected in the research, we’re seeing that our Gen Z and Millennial customers are actively thinking about and engaging with their finances to gain control of their money and they’re optimistic about their savings and budgeting abilities,” said Andrew Morrison, Chief Product and Growth Officer at ubank.
Morrison pointed out that ‘Rainy Day’ was the top savings target (42 percent) among ubank Save account holders, followed by ‘Holidays’ (31 percent) and ‘Home’ (27 percent).
“That’s why EOFY and tax time is the perfect time to review and set financial goals for the financial year ahead, including how you might use the money you get back from tax,” he added.
Morrison recommends using your tax refund wisely.
Depositing it into a high-interest savings account, such as ubank’s new offering with a 5.5 percent rate starting July 1, can maximise returns while you decide on the best use.
Building or replenishing an emergency fund is another smart move, providing a financial buffer for unexpected expenses.
Making extra payments on your home loan can reduce interest charges, while paying off debts like student loans or credit cards can alleviate financial burdens.
Investing in necessary work-related equipment can also lead to potential tax deductions, making it a prudent financial decision.
For those planning major purchases or experiences, setting a holiday savings goal using a banking app can help achieve financial targets.
Ubank allows users to open multiple Save accounts with specific goals, aiding in efficient financial management.
Investing in personal development through courses or workshops can be beneficial, while charitable donations offer the dual advantage of contributing to the community and potential tax deductions.
Using budgeting tools to manage spending on items that bring joy can also ensure financial stability and satisfaction.
Despite 37 percent of respondents feeling confident in spotting tax-related scams, the ATO received 22,000 reports of impersonation scams in the past year, with a 34 percent increase in reports between March and April.
“There’s often a rise in scammers impersonating the ATO around the end of the financial year. Popular scams include telling you that you’re entitled to a tax refund, or you owe the ATO debt,” Morrison warned.
“Our research indicates that whilst there might be some level of confidence amongst Gen Z and Millennials in spotting scams, 66 per cent of young adults are exposed to potential scam attempts at least once a week, so it’s important to stay scam savvy. Remember, if you get a message or phone call from someone claiming to be the ATO, or any organisation including your bank, and they ask for your financial info, don’t engage, instead call the organisation back yourself to check. And remember to never click on links in unexpected SMSs,” he advised.
With EOFY approaching, it’s an ideal time for young adults to boost their financial knowledge and remain vigilant against scams, ensuring they manage their finances securely and effectively.
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