ASIC is encouraging people to make a positive start to 2017 by taking steps to set and achieve their financial goals.

‘One of the most popular New Year resolutions people make is to take control of their money.  Having a financial plan in place is a key part of this and will help you achieve your financial goals’, said Miles Larbey, Senior Executive Leader for ASIC's MoneySmart.

'Yet according to research conducted for ASIC, about 45% of Australians say they have a short term financial plan in place, while only 25% say they have a long term plan[1].'

‘Whether you're interested in organising your household budget, getting on top of debts or saving for something significant, ASIC’s MoneySmart website has free and impartial guidance and tools to help you reach your goals’, added Mr Larbey.

Here are ASIC’s MoneySmart New Year financial tips to make your money work for you.

1. Review your finances

'Work out your short, medium and long term financial goals and priorities and put a plan in place to achieve them in 2017. ASIC's MoneySmart money health check will ask you some easy questions about your personal finances and give you some tips to improve your financial situation if needed', said Mr Larbey.

'A budget is the cornerstone of a financial plan. Use ASIC’s MoneySmart interactive budget planner to help you work out where your money is going and where you might be able to save. You can also use ASIC's MoneySmart TrackMySPEND app to manage your money on the go.' 

'As part of reviewing your finances, you might want to check your credit history. As lenders will review your credit report when you apply for credit or a loan it is important to check your credit history details are correct.'  

'You are entitled to obtain one free copy of your credit report each year from a credit reporting agency' Mr Larbey said. 'ASIC's MoneySmart has guidance on the best way to do this.'

2. Take control of your debts

'Get your finances on track this year by taking control of your debts, including any credit cards which may have been over-used during the festive season' said Mr Larbey.  

'A credit card debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest, if you only pay the minimum repayment.'

'If you are one of the 20%[2] of visitors to ASIC's MoneySmart website who said they used their credit card for Christmas spending, use our credit card calculator to see how much time and money you can save by making higher repayments,' said Mr Larbey.

3. Create a savings buffer

'Having a savings buffer or emergency fund gives you breathing space to deal with life's ups and downs, and means you won't have to borrow money if something unexpected happens,' said Mr Larbey.

'A good tip for building up a savings buffer is to "set and forget", by opening a separate savings account and making regular payments automatically via your bank or from your pay,' added  Mr Larbey.

ASIC's MoneySmart has a new video on how to build a savings fund to help consumers cope with unexpected expenses and ASIC's MoneySmart savings goal calculator can help people  work out how long it will take to reach their savings goals.

4. Maximise your super

'Get to know your super and join the three quarters of Australians who know exactly or roughly their superannuation balance[3]. You can do this by going to your super website or reviewing your super statement', said Mr Larbey.  

'Combining multiple super accounts to save fees, making extra contributions and reviewing your investment options can make a big difference to your retirement funds. Use ASIC’s MoneySmart retirement planner to find out if your super savings are on track.'

5. Buying a car in 2017?

'If you or someone you know is planning to buy a car in 2017, ASIC's free MoneySmart Cars app will help you understand the real costs of buying and running a car and avoid traps such as being sold add-on extras you don't need or want so you get the best deal on the finance' said Mr Larbey.

For example, using ASIC's MoneySmart Cars app reveals that purchasing a $15,000 used car on finance, will cost $817 per month, and a total of over $50,000 over 5 years, with interest and running costs taken into account.

ASIC's MoneySmart Cars app is available on the App Store and Google Play. 

6. Seeking financial advice

'If you think you might need personal financial advice in 2017, for example if you are planning to retire, use ASIC's MoneySmart financial advice toolkit.  It will help you navigate the financial advice process step by step, choose a financial adviser and know the questions to ask', Mr Larbey said.

Background

ASIC is the Australian Government agency responsible for financial literacy, consistent with its strategic priority to promote consumer confidence and trust in the financial system.  Financial literacy is about having the knowledge, skills, attitudes and behaviours to make good financial decisions. 

ASIC leads and coordinates the National Financial Literacy Strategy, which sets out a national framework for financial literacy work in Australia.  The Strategy highlights the importance of providing people with tailored resources and tools, and of responding to the financial issues facing vulnerable sectors of the community.  People experiencing high financial stress and crisis are identified as one of a number of priority audiences in the National Strategy.

ASIC’s MoneySmart website provides impartial and trusted financial guidance and free tools to support informed financial decision-making for all Australians.