Worried about your money in 2017?

It seems most Australians are concerned about how their finances will fare this year. Brighten your future in 6 steps.

Nearly 70% of Australians are worried about their finances in 2017, according to new research from St.George Bank.

Concerned respondents to the bank’s survey of 1,000 adults across Australia also said what their main reasons for concern in 2017 were. These were the top three:

  1. The Australian economy: 55%
  2. Housing affordability: 44%
  3. Household debt level: 42%

Top 3 Financial Goals for 2017

As for financial goals, these were the three most common responses from the survey:

  1. Saving: 34%
  2. Paying down debt: 25%
  3. Staying afloat: 23%

The most popular reason for saving was for holiday or travel, followed by ‘for a rainy day’ and buying a home. We weren’t so different last year, going by MoneySmart’s poll.

2017’s Biggest Financial Challenges

Respondents also identified what their biggest financial challenges were for the year:

  1. Cutting back on discretionary spending: 39%
  1. Getting personal debt under control: 29%
  1. Maintaining a lifestyle during retirement: 28%
  1. Saving enough for a house deposit: 28%

Time to reassess and commit

St.George General Manger for Retail Banking, Ross Miller, said now is a great time for Australians “reassess their finances” and “commit to making positive financial goals”.

“Our findings show nearly half of Aussies surveyed felt unhappy with their overall financial health in 2016, and the majority of those are aged 18-24 and 45-54,” he said.

“However it’s positive to see all age groups said creating a budget and sticking to it will help them achieve a better financial outcome in 2017.

“Once the festive season is behind you, it’s time to take a fresh look at your 2016 finances and with a bit of planning and budgeting, 2017 could be a financially rewarding year.”

 6 steps to brighten your financial future

The Australian Securities and Investment Commission (ASIC) has pushed for more Australians to take steps to set and achieve their financial goals in 2017.

Senior Executive Leader for ASIC’s MoneySmart, Miles Larbey, said less than half of Australians (45%) have a short-term financial plan in place, while only a quarter (25%) have a long-term plan, according to their research.

“One of the most popular New Year resolutions people make is to take control of their money,” Mr Larbey said.

“Having a financial plan in place is a key part of this and will help you achieve your financial goals.”

ASIC shared the following six ‘MoneySmart New Year’ financial tips to “make your money work for you”.

1. Review your finances

Mr Larbey said to work out your financial goals and priorities (short-, medium- and long-term) and to “put a plan in place to achieve them in 2017”.

“A budget is the cornerstone of a financial plan,” he said.

“As part of reviewing your finances, you might want to check your credit history.

“As lenders will review your credit report when you apply for credit or a loan, it is important to check your credit history details are correct.

“You are entitled to obtain one free copy of your credit report each year from a credit reporting agency.”

Try out our Budget Planning Calculator

2. Take control of your debts

20% of visitors to ASIC’s MoneySmart website said they used their credit card for Christmas spending. Mr Larbey encouraged those cardholders to see how much they could save by making higher repayments.

“A credit card debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest, if you only pay the minimum repayment,” he said.

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3. Create a savings buffer

“Having a savings buffer or emergency fund gives you breathing space to deal with life’s ups and downs, and means you won’t have to borrow money if something unexpected happens,” said Mr Larbey.

“A good tip for building up a savings buffer is to ‘set and forget’, by opening a separate savings account and making regular payments automatically via your bank or from your pay.”

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4. Maximise your super

With around 40% of Australians unsure of how much super they have, Mr Larbey said people should get to know their super better by going to their super website or reviewing their super statement.

He also pointed out that “combining multiple super accounts to save fees, making extra contributions, and reviewing your investment options can make a big difference to your retirement funds”.

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5. Buying a car in 2017?

For those planning on buying a car in 2017, Mr Larbey advised to understand the real costs of buying and running a car and know how to avoid traps such as add-on extras you don’t need.

“Using ASIC’s MoneySmart Cars app reveals that purchasing a $15,000 used car on finance, will cost $817 per month and a total of over $50,000 over 5 years, with interest and running costs taken into account,” he said.

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6. Seeking financial advice

Mr Larbey said people who think they need financial advice in 2017 should consult ASIC MoneySmart’s financial advice toolkit.

“It will help you navigate the financial advice process step by step, choose a financial adviser and know the questions to ask,” he said.

Related Article: Retirement planning – do you need professional advice?

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