19 February, 2016
Findings from ME’s latest Savings Intentions and Behaviours Report.
Around 23% of Aussie credit card holders reckon they’re still paying off Christmas debt, according to a survey by ME.
Add in summer holiday spending and back-to-school expenses, and many Aussies will be starting off the year on the financial back foot.
ME Head of Deposits and Transactional Banking Nic Emery strongly advises anyone struggling with credit card debt to address the issue as soon as possible.
“Set up a repayment plan or consider consolidating debts through a personal loan.
“It’s also important to break any repeat behaviour. Make a plan to save or consider cutting unnecessary expenses during peak spending periods.
“Once you’re in a position to start saving, consider making automated deposits into a high-interest savings account or term deposit to keep you on track.”
ME’s Savings Intentions and Behaviours Report also unearthed a number of obstacles inhibiting effective saving. In the last six months to December 2015:
“A lack of money discipline is holding back many Australians from realising their financial goals,” added Emery.
“The key to getting ahead financially is discipline: track the real costs of your household expenses, set a realistic budget, and commit to every single detail, consistently.
The Report also uncovered how Australians households are using their bank accounts to save:
"For some ‘live-for-today, plan-for-tomorrow types’ regular savings habits may not come naturally − if you’re one of these, consider processes such as automatic transfers that helps you set, forget and save,” advised Emery.
Savings goals: What we’re saving our pennies for
‘Saving for a holiday, car or other large expense other than a home’ was reported as the top financial goal that 28% of Australian households are currently working towards, followed by ‘building up rainy day savings’ (24%).
Fewer households are saving to buy an investment property (2 points down to 8%) as at December 2015, compared to saving enough to buy a property to live in (up 1 point to 10%).
Furthermore, fewer households reported to be ‘paying down their mortgage’ (down 4 points to 26%) or ‘building wealth for retirement’ (down 3 points to 17%) as their top financial goal.
About the survey: Research was commissioned by industry super fund-owned bank ME with DBM Consultants and RFi Group, using an online survey method completed by 1,500 Australian adults and 2,000 Australian credit card holders.