2022 is here. We’ll let that sink in.
As it is customary this time of the year, people take some time to reflect on the prior year, review their goals and accomplishments, and set new fresh ones.
2021 was a challenging year on many levels for many people, but if anything good came of out the pandemic, it was that it’s made people more aware of their spending habits.
Let’s look at some facts
MyState Bank asked more than 1,000 Australians what their biggest financial resolutions were going into 2021. The survey found out that 48% of Aussies were resolving to be better money managers by cutting down on discretionary items, including gambling, toys and games, food takeout and delivery services, alcohol and cigarettes, and skincare and makeup. In addition, 3 in 10 Aussies had also pledged to start and maintain a budget.
In May 2021, Commonwealth Bank published its annual financial wellbeing report, which analyzed the data of over 5 million customers from March 2020 to March 2021. The report concluded that the financial wellbeing of Australians had hit a record high, marking the highest level and most significant year-on-year increase ever recorded since 2017.
It looks like making those New Year’s resolutions at the beginning of the year have paid off for some. So, to inspire you to join this savvy crowd and start working towards your own financial goals, we have selected the most popular financial resolutions and tips on how to stick to them:
Save to buy a home
3 out of 4 Australians think of homeownership as part of “the Australian way of life”. The hurdle for most people, however, is the deposit. So we’ve compiled a few top tips to help you get there.
- Set your goals, write them down and track your progress every month.
- Use free budget apps such as Pocketbook or Mint to help keep yourself on track.
- Look for new ways to save. Consider swapping the car for public transport, for example. Call your utility providers and ask if you’re getting the best deal.
- Find out what financial support is available to you. First home buyers might be eligible for the First Home Loan Deposit Scheme, and single parents might be eligible for the Family Home Guarantee.
Cut spending on expensive habits
Sometimes we’re so used to doing something that we don’t give it too much thought – that expensive monthly gym membership, a weekly visit to the nail salon, eating out every other day, Friday night drinks. Try to give the habit a miss for a whole month or replace it with a new one, and put what you’d typically spend into a savings account. It can be an eye-opener as to the real cost of habits, and it could be the incentive you need to change for good.
Improve financial literacy
‘Without a working knowledge of money, it is extraordinarily difficult to do well in life’, advises Sam Renick, a field expert specialized in financial education. If you want to improve your financial literacy, you can start with these tips:
- Subscribe to financial newsletters. It’s free, and there are many good options out there.
- Listen to financial podcasts. The good thing about podcasts is that you can chuck your headphones on and learn while you do housework, walk the dog.
- Follow financial social media accounts. We know a really good one. 😉
- Talk to a financial professional. A financial adviser can help you with basic money situations and more complex scenarios.
Build an emergency fund
If possible, and if you don’t have one yet, start setting aside some money for an emergency fund.
The size of your emergency fund will depend on your lifestyle, essential expenses, income, and dependants, but the rule of thumb is to have enough to cover at least three to six months’ worth of expenses.
The easiest way to achieve this goal is to simply put your savings on auto-pilot. Set up a regular transfer of funds out of your everyday account into a separate savings account.
Save for a big purchase
We know that making our coffee at home is one way to save a few dollars, but what else can you do? A few bucks here and there can propel your journey towards your financial goal, whether it’s paying off debt or saving for a big-ticket item. We’ve already covered a few in this article, but here are a few extra ideas:
- Activate the round-up feature in your bank account
- Use apps to scan receipts in exchange for cash
- Look for discount codes before buying anything online
No matter what your new financial goals are, we are here to help U achieve them. Start the conversation today.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.