As we look ahead to 2023, financial stress is a concern for many Australians. In today’s fast-paced and uncertain economic climate, managing finances can be a daunting task for many Australians.
With the constant rise of living costs, stagnant wages, and unexpected expenses, it’s no surprise that financial stress is a common concern among Australians.
A representative survey of 1,000 Australians by Savvy was conducted to understand their plans for managing their finances in the new year. The results of the survey show that a little over half of those polled (53 per cent) say they’ll create a budget to keep their finances in order.
The survey further showed that 64 per cent of those polled plan to use existing savings to pay off their Christmas expenses, while only 14 per cent will use credit cards.
Furthermore, 62 per cent of the female respondents said they’ll create a budget. Budgeting is a practical and proactive way to ensure that there is enough money for bills, savings and other important expenses, and it can help to avoid financial stress.
In addition to budgeting, the survey also found that 24 per cent of Australians intend to save more money than they did last year. Additionally, 20 per cent of Australian women will set up an automated savings plan during 2023. This shows that many Australians are focused on building their savings and making sure they have a financial cushion to fall back on.
The survey also revealed some additional strategies that Australians are planning to use in 2023 to take control of their finances.
- 12 per cent of Australians (9 per cent of men and 14 per cent of women) said they’d use a budgeting app to manage their finances, which is a practical tool to help people track their spending, set budgets, and achieve financial goals.
- 7 per cent of the respondents said they would consult a financial planner or adviser to help them create a plan and reach their financial goals.
In addition to budgeting and consulting a financial professional, 16 per cent of Australians, including 12 per cent of men and 20 per cent of women, said they would set up an automated savings plan. This could include direct debit to a savings account or a managed fund. This strategy can help people save money automatically, without having to think about it, and can be an effective way to build savings over time.
Interestingly, a shade under a quarter (24 per cent) of Australians said they’d “earn more money than last year.” For the most optimistic demographic, 18-24s (36 per cent) this may prove a winning strategy as they enter more senior positions.
- 12 per cent of the respondents would pay more into a mortgage offset account, which is a savings account linked to a mortgage that can reduce the interest paid on the mortgage.
- 16 per cent of the respondents would make investments (12 per cent into shares, 4 per cent into cryptocurrency.) This strategy can help people grow their wealth over time, but it does come with risks, and it is important to do your research and seek professional advice before making any investments.
With the ongoing uncertainty of the global economy, it’s more important than ever to take control of our finances and make sure we’re prepared for whatever the future holds.
Savvy spokesperson and personal finance expert Adrian Edlington says that inflation and higher interest rates have given people a “crash course” on managing their personal finances better.
“Over the last couple of years, Australians have had to really pay attention to every dollar that comes in and out of the household, and people are making more responsible choices with their finances as a result,” he says.
“In our last survey, 76 per cent of Australians said they’d only use their savings to fund their Boxing Day purchases if they were buying post-Christmas, and 48 per cent said they wouldn’t be making any purchases at all.
“7 per cent said they would consolidate debts, which is pleasing to see – reducing debts and the interest paid on them will mean more money for savings and better overall financial health for households.
“This could all indicate Australians are beginning to spend only within their means, so they could be better prepared for whatever economic ups and downs may eventuate during 2023.”
For full survey report with graphics, click here.