Yahoo Finance Aussies’ biggest financial goal for 2023
It’s been a tough year for Aussies struggling with the rising cost of living, and that’s why many are looking to reduce their expenses and increase their savings for their New Year’s resolution.
Research from Commonwealth Bank (CBA) found 93 per cent of Aussies had a financial goal for the new year.
More than half (51 per cent) said their top financial goal was to reduce living costs and expenses, while 41 per cent said they wanted to find ways to earn extra cash.
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“It’s that time of year when millions of Aussies will make New Year’s resolutions to get on top of their money, get in shape, or to live a greener lifestyle,” CBA chief behavioural scientist Will Mailer said.
“Sadly, we also know that a huge number of these resolutions won’t make it to February, as statistics historically show that many of us fall back into old habits in the first weeks of the year.”
Mailer said CBA’s behavioural science team was constantly analysing data, working with research partners and developing new tools and services to help customers achieve their financial goals.
“Behavioural scientists have spent decades looking at why we so often plan to make lifestyle improvements, only to then overspend on the weekend and skip our gym visit,” he said.
“These insights help us to set up strategies that will increase the likelihood that those health, wealth and professional goals actually become regular behaviours and stick over time. We are certainly seeing demand for tools and services that help people to more consistently follow through on financial goals.”
Mailer said any time of the year could be a good time to set a new financial goal, but behavioural science research showed ‘fresh start’ dates like January were among the most popular periods.
5 tips to stick to your New Year’s resolution
1. Avoid big and vague, focus on specifics
“One of the mistakes we make is to be too vague in our resolutions. Saying we want to ‘get in shape’ or ‘get on top of our money’ is very hard for us to track, and does not provide a good starting point,” Mailer said.
“Break down big goals into the one or two very specific behaviours that you will need to change. This might be saving a certain per cent of your pay each payday or to limit online shopping to a set day each week, with a nominated weekly spend limit. Where possible, set up ways to track and measure these behaviours over time.”
2. Create ‘if-this-then-that’ rules
“Behavioural science research has shown that follow-through rates can be higher when we are specific, not just about the goal itself, but how, when and where we plan to get there,” Mailer said.
“Rather than saying you will spend less on unnecessary items, you might say that, ‘on the first Sunday of each month, I will reserve 60 minutes between 3:00pm and 4:00pm to review and cancel any unwanted online subscriptions at my kitchen table. This helps to anticipate any barriers to success, and builds the right cues into our lives for our desired behaviours.”
3. Build in incentives
“It can be easy on New Year’s Eve to think about all the big changes you will make in January, but it’s another thing when that time rolls around and we have to take the difficult or boring actions to make it happen,” Mailer said.
“One strategy that behavioural scientists consider is the use of commitment devices, or putting incentives in place to help your future self to follow through. For example, you might agree with your partner that you will do the dishes for a week every time you miss your monthly budget target.”
4. Disrupt your environment
“Habits experts show that one of the best times to start a new habit is at a time of change in our lives. This could be moving house, changing jobs, or returning to a new work setup after summer break,” Mailer said.
“It is a chance to reset our environments and set new habits with new triggers, rewards and feedback. Take advantage of the summer break, to shake-up your 2022 work rituals. You might plan for a new desk or commute close to the park rather than the shops, or a new project team that brings their lunch to work each day.”
5. Willpower is not enough
“Another common mistake is that we rely too much on willpower when setting goals for the New Year. Willpower can be great to help us get started, but often we can get overwhelmed when we’re exposed to temptations or when our internal autopilot takes over,” Mailer said.
It’s important to capitalise on the strong willpower up front to set up systems around us that will help us to sustain good behaviours, like setting up auto-transfers on our savings, subscribing to a health food delivery service or disabling alerts on our social media accounts.”
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