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Australians care about their finances, but don't do anything about it

<em>Photo: Getty</em>
Photo: Getty

‘From little things, big things grow’ is a well-known maxim applied to nearly anything that takes time and effort.

And while Aussies evidently care about their financial situation, it seems not much is actually being done about it.

According to research by financial advice firm Perpetual Private, 71 per cent of respondents from a survey of 3,000 indicated their financial situation was third-highest on the list of things they cared about most, after their family (89 per cent) and their health (72 per cent).

But it’s not reflected in action, with 56 per cent admitting they don’t spend enough time planning for their financial future.

Less than a third (27 per cent) of respondents set savings goals, and only one in five (21 per cent) have a regular investment plan or invest spare or unexpected funds. On top of that, more of us are inclined to splurge than to save, with more than half (52 per cent) happy to spend on things we don’t need.

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Indeed, the biggest factor (56 per cent) Aussies say is holding them back from doing what they really care about is: money.

Perpetual client insights and analytics senior manager Gary Lembit urged Australians to “to act on what they care about” and “make their dreams a reality”.

“If you have a resolution around your finances, write down your goals and develop a plan with actionable steps to get you there,” he urged.

“Put thought into your likely income and expenses over the long term, the value of the things you want and how much time and wealth you are willing to commit to achieving those things.”

What’s stopping us from planning?

It seem there’s a bit of a vicious cycle in motion already: more than half (55 per cent) of respondents said money was a key barrier to achieving their goals, followed by ‘time’ (34 per cent) and ‘work getting in the way’ (13 per cent).

These obstacles are well-known, Gambit observed.

“Time and money are the age-old challenges preventing people spending time on the things they care about, but with the right focus they are the fundamental factors to get us where we want to be.”

What can we do about it?

When planning and thinking about your life goals, Gambit says you should ask yourself the following questions: how much will it cost to live in the area you want to? What level of education do you want to provide your kids (if you have any)?

“These are big milestones requiring significant investment, so thinking about life goals early is important. Planning how much you will need to accumulate to realise them is going to give you a tremendous amount of financial relief.”

According to Perpetual Private, here’s a checklist to help you sort your finances:

  • List and value all your assets: that includes real estate, retirement savings, shares, vehicles, jewellery, etc

  • List your debts – including mortgage, credit cards, loans, etc

  • Develop a budget and track your expenses – there are a variety of apps available to help with this. Here are the investing and ‘robo-advice’ apps you need to know about

  • Assign a monetary value to your key life goals – think about your house and location, family education, retirement plan, etc

  • Make additional contributions to your superannuation

  • Use additional or unexpected funds to pay down debts

  • Consider seeing a financial adviser about starting an investment plan

  • If you’re approaching retirement, start thinking about estate planning and designate beneficiaries on your financial accounts

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