1 May 2017
New ME research confirms that tracking spending has a powerful influence on your ability to save and set money goals.
ME put four participants to the test by asking them to track their spending for the entire month of February using ASIC’s award-wining TrackMySpend app.
Overall, all participants agreed the exercise empowered their money management in three major ways:
These benefits were amplified among those less savvy or confident in managing their money.
For instance, 26-year-old warehouse worker, Matthew, who has not saved much money, said the exercise had a profound impact:
“Tracking my spending has changed my life in that I’ve realised saving is possible, if I simply cut some things out. It’s inspired me to start saving for a house, or maybe a new car. Now that I have some goals to work towards, I have more incentive to watch my spending and grow some savings. My girlfriend and I are going to open a savings account and try our best. If I cut out all the takeaways I’m consuming, I reckon I could save $300 per month, with the added benefit of improving my health, which is priceless.”
“Being aware of where your money goes, and knowing where and how to cut out unnecessary expenses is a fundamental step to setting a realistic budget,” said ME Head of Deposits and Transactional Banking, Nic Emery.
“Only then can you take charge and make progress towards realising your money goals.”
According to previous ME research, 59 per cent of 1,500 households surveyed did not record their monthly expenses, and 53 per cent failed to set a weekly or monthly budget in the past six months to December 2016.
“In addition to identifying savings, understanding your expenses can be beneficial in other ways,” said Emery.
“For example, credit applications such as home loans require these details. Or you may want to make informed lifestyle decisions such as changing to a lower paid job or starting a family.”
Emery says there a number of ways you can track your expenses, including apps, excel sheet method or the old-fashioned notebook method.
“Whatever you choose, the most important thing is to do it, and keep it up for a period of time so you can identify key patterns. Only then will you be able to make informed decisions and take charge of your money,” he said.
Research methodology: ME asked four participants to track their spending for one month using ASIC’s award-winning TrackMySpend app. ME surveyed participants at the start and end of the exercise to ascertain noteworthy differences in attitudes and behaviours around money management.