Australians reset financial goals for 2021
Over half of Australians (54%) said ‘COVID-19 has forced them to change their 2021 financial goals’ compared to previous years, according to a new study by ME Bank.
In the study of 1,000 Australians, the top 10 most listed financial goals included:
|Item||% [Multiple response]|
|1. Building up ‘rainy day’ savings||44%|
|2. Saving for a holiday, car or other expense other than a home||37%|
|3. Saving enough to buy a property to live in||22%|
|4. Reducing your expenditure on ‘expensive habits’||20%|
|5. Building wealth for retirement – on top of existing||19%|
|6. Setting up a budget or a savings plan||17%|
|7. Paying off a mortgage||16%|
|8. Not building up any more debt||16%|
|9. Investing or trading in shares, bonds, commodities etc.||15%|
|10. Reviewing my water, gas and electricity contracts to ensure value for money||15%|
When Australians were then asked to rank their goals by importance, the top ten included:
|Building up ‘rainy day’ savings||1 ↑|
|Saving for a holiday, car or other expense other than a home||2|
|Saving enough to buy a property to live in||3 ↓|
|Reducing your expenditure on ‘expensive habits’||4 ↑|
|Building wealth for retirement – on top of existing||5|
|Paying off a mortgage||6 ↑|
|Setting up a budget or a savings plan||7↑|
|Not building up any more debt||8↑|
|Investing or trading in shares, bonds, commodities etc.||9|
|Reviewing my water, gas and electricity contracts to ensure value for money||10↑|
The top ranked goal, ‘building up rainy day savings’ moved to top position from third place one year ago – most likely influenced by COVID-19 and a desire to improve financial security.
According to ME’s study, 66% of Australians said ‘COVID-19 had enlightened them with the importance of building up ‘rainy day’ savings’.
ME’s General Manager Personal Banking, Claudio Mazzarella said this is a step in the right direction given ME’s latest Household Financial Comfort Report showed 21% of Australian households had less than $1,000 in cash savings.
“In uncertain times it pays to focus on what you can control. Growing a stash of emergency money can be good for your bank balance – and your peace of mind.”
Other goals rising up the ranks of importance included ‘reducing expenditure on expensive habits’, ‘setting up a budget or savings plan’, and ‘not building up any more debt’ – again reflective of a conservative spending mindset post COVID-19.
“The majority of Australians will be saving more and thinking about what to best do with their money in 2021,” said Mazzarella.
The biggest barriers in the way of Australians reaching their 2021 financial goals were reported to be ‘inadequate incomes’ (41%) ‘expenses’ (37%), and the ‘impact of COVID-19’ (28%).
Overall, the minority of respondents (29%) said they were ‘very likely’ to achieve their goals in 2021, indicating a general lack of confidence in attaining them.