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Australians not doing enough to save money, finds report

Most Australians are not taking enough small steps to improve their financial situation despite it being one of the top things they care about, a new report has found.

ASX-listed financial services company Perpetual Private recently surveyed 3,000 Australians about the things they most care about, and their attitudes to their financial situations.

The findings, released in its What Do You Care About report, revealed that forward planning is crucial to overcome financial hardship and achieve life goals, but few Australians are putting plans into action.

Perpetual found that financial situation is one of the top three things that Australians care most about in life, with 71 per cent of respondents saying that their financial situation is critical to their wellbeing. This was closely behind family (89 per cent) and personal health (72 per cent).

The research found that 74 per cent of Australians are only “okay” or “satisfied” with the time and effort they dedicate to things they care most about in life.

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The report reads: “Australians are not doing enough to get their financial situation in order to realise their goals, despite ranking this in the top three things they care about.

Many are disregarding small and simple steps to manage their money, which could benefit them in the long run,” it went on to suggest.

“When it comes to planning for the future, most Australians tend to have a short-term view,” the report reads.

According to Perpetual’s research, 27 per cent of Australians set personal goals for savings, 11 per cent have regular investment plans and 13 per cent invest in spare or unexpected funds.

Gary Lembit, senior manager of client insights and analytics at Perpetual, said that many Australians aren’t translating their thoughts and needs into action, “particularly when it comes to money”.

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Mr Lembit suggested that if Australians have a resolution around their finances, they should ensure they write down their goals and develop a plan with actionable steps to get them there.

“Put thought into your likely income and expenses over the long term, the value of the things you want and how much time and wealth you are willing to commit to achieving those things,” he told consumers.

According to the researchers, 30 per cent of respondents said they haven’t articulated their thoughts into plans. Meanwhile, 56 per cent do not spend enough time planning for their future.

“This is likely due to a number of common hurdles to completing long-term plans,” the report reads.

“Over half of the respondents (55 per cent) see money as a key barrier to achieving their plans, but also cited ‘time’ (34 per cent) and ‘work getting in the way’ (13 per cent) as additional obstacles,” the report reads.

Mr Lembit urged consumers looking to improve their financial situation to think about life goals early to overcome future obstacles and financial struggles, such as costs associated with living in a preferred area or educating children at a desired level or institution. 

“These are big milestones requiring significant investment, so… planning how much you will need to accumulate to realise them is going to give [Australians] a tremendous amount of financial relief,” Mr Lembit. 

Perpetual Private also provided a financial checklist to help Australians achieve their financial goals. The list states that consumers could: 

  • Create a list of every asset and value them accordingly
  • Create a realistic budget to stick to and track all expenses (there are apps that provide this service)
  • Assign monetary values to core life goals in the future
  • Make additional contributions to superannuation
  • Create a list of all debts
  • Speak with a financial adviser about an investment plan
  • For retirees, think about estate planning and designating beneficiaries on financial accounts 

[Related: AMP launches financial literacy platform]

 

Australians not doing enough to save money, finds report
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Ezekiel MacNevin

Ezekiel is a journalist on the mortgages, property investment and wellness titles at Momentum Media. 

Before joining the team in 2019, he was a freelance journalist for Vice Australia, Pulse Radio and the Sydney-based travel publication Global Hobo, among others. 

Ezekiel studies a double Bachelor of Communications and International Studies at the University of Technology, Sydney.

You can email Ezekiel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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