The pursuit of a preferred lifestyle is the main reason behind Hongkongers choosing to save their money, GoBear’s latest study has revealed.
The Financial Health Index conducted by financial products comparing platform GoBear has shown that 65% of Hong Kong people said that lifestyle was the biggest motivation for saving money. Preparing for retirement and emergency situations came second, with travel and holidays ranking third.
Delving into the reasons for saving money, the study also shows that plenty of young people saved money for short term goals. 52% of respondents (aged from 18 to 25) positioned travel as their top financial goal, compared to 41% of the general Hong Kong public. Meanwhile, 39% said buying their favourite items – such as electronics, handbags, and gadgets – was their top goal, compared to 19% of the general public.
Alongside travel, buying a property ranked high among younger age groups. 46% of 18-to-25-year-old respondents and 42% of 26-to-35-year-olds said this was a financial goal.
“Hong Kong people are lifestyle savvy and invest in today rather than planning for the future. GoBear calls out to the Hong Kong government to invest in campaigns to drive behavioural changes among our young people and get them planning for their wealth management at an earlier age,” said Iris Tse, managing director of Hong Kong, GoBear.
Less surprisingly, for the older 46 to 55-year-old age group, preparing for retirement was their top financial goal. But interestingly only 9% of respondents said retirement planning should start soon after people graduate and start working. One in four thought they should start saving after working six to 10 years.
The average age for planning retirement according to the study is 42, 20 years after starting work. And GoBear has included a cheeky selling point in their findings pointing out by that age, Hongkongers could be saving an average HK$2,170,000 if money had been regularly put into a retirement fund as soon as they started working.
The study also found that in general, people in Hong Kong felt financially secure, with 55% saying they could continue covering their living expenses for more than six months. However, only 3% said they felt very secure. When asked about the top barriers hindering financial security, 39% said they did not know how to grow their wealth effectively; while 38% said the unstable economic condition in Hong Kong was the major problem. The economic condition was the biggest concern for almost half (49%) of the citizens aged 56 to 65.
In addition, there is a discrepancy between male and female respondents over financial literacy, as 62% of women said their financial knowledge was average or below average, compared to only 45% of men.
Last but not least, two-thirds said they carefully considered whether they could afford something before purchase (66%), 41% set a monthly spending budget, and half made it a rule to follow the budget they’d set. Despite that discipline, only 23% of Hong Kong people have taken real financial action towards retirement planning.
“There are multiple factors, including the low-interest environment, slow income growth, and high property prices, affecting Hong Kongers financial behaviour, and why we see them saving for short-term enjoyment rather than planning for their retirement,” said professor Tai Leung-chong, executive director of Lau Chor Tak Institute of Global Economics and Finance, The Chinese University of Hong Kong.
“We now need to get more people investing for the long-term, because every penny counts, and this will make a big difference to financial security in the long run.”