Financial fitness a top priority in 2016; Australians pledge to save $21 billion
- 69 per cent of Australians making financially-focused New Year's resolutions want to save money in the New Year
- 85 per cent of those making savings resolutions have a specific savings target, on average $11,234
- Priority saving items for 2016 include travel (53 per cent), saving for a rainy day (46 per cent) and saving for a home or home improvements (40 per cent)
New Westpac research released today has revealed saving money is a top priority for Australians. Over two million Australians intend to make a New Year's resolution about saving money in 2016, with a total savings target of $21 billion.
The Westpac New Year Resolutions Report shows over four in five (85 per cent) of those who are making a New Year savings resolution have a specific savings target in 2016, on average aiming to save $11,234 for the coming year.
The top reasons for saving money in 2016 are to travel or take a holiday (53 per cent), to save for a rainy day (46 per cent) and home related expenditure (40 per cent) - whether it is buying a new home, renovating or saving a deposit for a first home.
Head of Consumer Deposits at Westpac Elliot Smith said: "It's encouraging to see so many Australians are planning to make a financial resolution for the New Year. It is also positive to see that almost seven in ten of those financial resolutions relate to saving money - a sign more Australians want to take control of their finances and start the year on the right foot.
"Whether it is saving for an overseas holiday, buying a new home, renovating, or building a rainy day fund, we are seeing Australians considering a number of strategies to help them reach their goals. These include reducing expenditure, reducing impulse buys and creating a budget."
The research also indicates that sticking to a plan can be tricky with three in five (61 per cent) Australians who made financial New Year's resolutions in the past, not reaching their financial goal. Those surveyed on average kept their resolution for about four months.
Some of the top reasons for breaking resolutions are unexpected expenses or change in financial circumstances (41 per cent), not having enough willpower (27 per cent) and the goal set being too big or unachievable (17 per cent).
"Some ways to keep working towards your long term goals are to speak with your local banker to create a realistic budget and set out a clear plan with check in points along the way. Using the SMART method (Specific, Measurable, Achievable, Realistic and Timely) can provide a good starting framework. Then regularly monitoring your finances online to keep a close eye on where the money is being spent and where there is capacity to save a little extra is a simple, but effective strategy," said Mr Smith.
For further information on Westpac products and services, please visit: www.westpac.com.au/personal-banking
To help Australians achieve their savings goal, The Davidson Institute1 offers five saving tips:
- Make a plan: If you are setting a big goal, break it down into smaller manageable steps and plan how you will achieve this. By accomplishing one step at a time, you will stay on track and focused. Westpac's Online Budget Planner can help you get started.
- Hold yourself accountable: Do whatever you feel will keep you committed to your goal. For some people, simply putting your goal down on paper, along with how exactly you're going to achieve it, will allow you to refer back to it on a regular basis and hold you more accountable. Others might wish to tell family and friends of their intentions. Another simple reminder is to name your savings account in Internet Banking and update your regular transfer with the name of what you're saving for to keep it front of mind.
- Monitor your spending: Keep a record of when and where you're spending money to help you keep on track. Monitoring your finances online or using a mobile banking app can help you keep a closer eye on where your money is being spent and where you can save.
- Allow for mistakes: You need to recognise that you may occasionally stumble and that should not be a reason to give up. It's important to remember that two steps forward and one step back is still one step forward.
- Reward yourself: Plan some rewards to acknowledge the progress you have made throughout the year. This will motivate you to keep accomplishing your goals.
Make your three saving priorities a reality in 2016:
- Travel: For those saving for a holiday, a high interest savings account or term deposit can assist you reach your saving target sooner.
- Rainy day fund: A financial expert can help you to better meet your financial goals by creating a realistic budget and a plan on how to meet them.
- Home related: If you'd like to purchase a home or renovate in 2016, a home finance manager can advise you on how much you need to be saving each month to meet repayments, and how much you may be able to borrow, as this will help you create a pragmatic budget.
Key findings from the Westpac 2016 New Year Resolution Report
- On average, Aussies are making resolutions to save close to $21 billion
- Among Aussies intending to make financial resolutions in 2016, 7 in 10 (69 per cent) will make resolutions revolving around savings - half (55 per cent) are aiming to save and 3 in 10 (29 per cent) want to reach a specific savings goal.
- Among those with New Year savings resolutions, over 4 in 5 (85 per cent) have a specific savings target in 2016 - on average, aiming to save $11,234.
- Among those with a specific savings target, a quarter (24 per cent) are looking to save over $15,000
- Among those intending to make a New Year resolution in 2016, three in 10 (29 per cent) are intending to make financial resolutions
- 3.1 million Aussies are intending to make financial resolutions in 2016
- 2.1 million Australians are intending to make a savings-related financial resolution in 2016
- Among those with New Year savings resolutions, the top reasons for planning to save money are to travel / take a holiday (53 per cent), for a rainy day (46 per cent) or are home related (40 per cent) - whether it is buying a new home (17 per cent), a renovations (15 per cent) or saving a deposit for a first home (15 per cent).
- Among Australians who have set financial resolutions in the past, three in five (61 per cent) did not reach their financial goal, sticking to their resolution for, on average, four months.
- For those who have broken their previous financial resolutions, the top reasons for doing so are because of unexpected expenses or change in financial circumstances (41 per cent), not having enough willpower (27 per cent) and their goals were too big or unachievable (17 per cent).
- The most common strategies Australians have in place for achieving their savings goals in 2016 are to reduce expenditure (50 per cent), reduce impulse buys (45 per cent) and create a budget (42 per cent)
Westpac Mobile Banking app
Westpac Mobile Banking is a secure and convenient way to bank. Using the app, Westpac customers can view account details including interest rates, credit card payment amounts and due dates, and manage daily banking needs such as paying bills and transferring money. In addition, customers can use Westpac's Get Cash to withdraw cash from any Westpac ATM without a Debit Card, and order ahead from selected cafes with Hey You. For more information visit http://www.westpac.com.au/personal-banking/online-banking/mobile-banking/
About Davidson Institute
The Davidson Institute is a free online portal offering financial education on a range of money management topics for individuals, businesses, not for profit organisations and community groups via easy to understand information and webinars. For more information visit https://www.davidsoninstitute.edu.au/
About the Westpac 2016 New Year Resolutions Report
The Westpac research was commissioned by Westpac and powered by Lonergan Research.
Lonergan Research surveyed 1,033 Australians aged 18 and over. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted between 16 November and 24 November 2015. Following the completion of interviewing, the data was weighted to the latest population estimates sourced from the Bureau of Statistics.
1. Davidson Institute, https://www.davidsoninstitute.edu.au/