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What are you saving for?

Financial Planning  |  23/01/2017  |   3 min read

According to a new survey conducted by ME Bank, a quarter (26%) of Australian households are putting money aside for a holiday or car in 2017. Paying off the mortgage (25%) and building up ‘rainy day’ savings (25%) follow closely behind.

Unfortunately, many people fail to achieve their savings aspirations. According to the same survey (which polled 1,500 Australian households), this often comes down to ineffective savings habits.

•    53% fail to set a weekly or monthly budget
•    35% rarely stick to a budget or spending allowance
•    59% do not keep a written or electronic record of monthly expenses 
•    42% fail to pay off their credit card each month

ME Bank’s Head of Deposits and Transactional Banking, Nic Emery, said a lack of money discipline is holding many Australians back from realising their financial goals.

“The key to getting ahead is tracking the real costs of your household expenses, setting a realistic budget and committing to every single detail, consistently.

“For some ‘live-for-today, plan-for-tomorrow’ types regular savings habits may not come naturally − if you’re one of these people, consider introducing processes such as automatic transfers that helps you set, forget and save,” he said.

According to ME’s research, only 21% of households set up automatic transfers to a savings account. Others prefer to:

•    Transfer money to a savings account when spare funds are present (52%).
•    Put money into a savings account and then transfer it to an everyday account when needed (19%).
•    Keep savings in accounts they can't withdraw from (e.g. term deposits) (17%).
•    Just accumulate funds in an everyday account (15%).
•    Add funds to a home loan offset account (11%).

An Equip financial planner can help you reach you goals, find out more about the service available by clicking here.

This article is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Equip Product Disclosure Statement (PDS).  

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