"86% of Salary Goes to Fixed Expenses"… Half Say "Saving 30% of Income Is Difficult"

'2023 Republic of Korea Financial Consumer Report'
12.7% of Respondents Spend More Than Their Income
31.3% Have No Financial Goals or Prioritize Immediate Issues

[Asia Economy Reporter Buaeri] In the era of high inflation and high interest rates, financial consumers responded that solving immediate living expenses is a priority, revealing that their capacity to save is limited. Nearly half of the consumers find it difficult to save one-third of their income.

Hana Financial Research Institute analyzed the overall financial life of 5,000 men and women aged 20 to 64 through the '2023 Korea Financial Consumer Report' released on the 29th.

According to the report, 86% (4.21 million KRW) of the average monthly household income (4.89 million KRW) was spent on fixed consumption, insurance, loan repayments, fixed savings, and investments, leaving only 680,000 KRW as disposable income. Assuming all fixed savings, investment funds, and surplus are saved, the average saving capacity was around 1.5 million KRW, approximately 30.9% of income.

Only 25% of respondents had the capacity to save more than half of their income, while 45% had saving capacity below 30% of their income. Additionally, 12.7% of respondents spent more than their income, making saving impossible.

The report also showed that when asked about their financial and economic goals for this year, 17.9% of financial consumers prioritized solving immediate living expenses, and 13.4% said they had no financial goals. This perception was higher among the MZ generation (Millennials + Generation Z), suggesting that their limited saving capacity leaves little room to prepare for the future.

Furthermore, 8 out of 10 financial consumers reported having experience investing in cryptocurrencies. Among these investors, 71.1% experienced cumulative losses exceeding 10%.

Half of the financial consumers expressed an intention to stop transactions with existing financial institutions and start using new ones next year. The willingness to start transactions with new financial institutions was 51.6%, and the intention to leave existing institutions was 54%, both exceeding half. Fintech and Big Tech showed higher short-term transaction intentions within one year, while traditional financial institutions had higher long-term transaction intentions for retirement fund management.

According to the report, services from Big Tech and Fintech, once thought to be exclusive to the MZ generation, have become widespread. MyData services have rapidly expanded, with 50% of consumers having experienced them. Consumers using financial services from Big Tech and Fintech such as Naver Pay, Kakao Pay, Toss, Payco, Fink, and Bank Salad reached 91.9%. Hana Financial Research Institute explained, "Among the MZ generation, 2 out of 10 consider Big Tech or Fintech more important financial institutions than banks when conducting financial transactions, highlighting a paradigm shift toward mobile finance."

The most used financial channel by consumers was the 'mobile app.' In the past six months, 82.1% used bank mobile apps, 2.2 times more than branch users. Yoon Sun-young, a researcher at Hana Financial Management Research Institute, said, "In an intensely competitive environment without boundaries between sectors and an unpredictable recession, the need to understand and sensitively respond to the rapidly changing financial consumers has become even greater."

This content was produced with the assistance of AI translation services.