ASIC is encouraging Australians to start the New Year by setting financial goals.

'Every January, one of the most popular New Year resolutions people make is to take control of their money. Yet according to research conducted for ASIC, about 44% of Australians say they have a short term financial plan in place, while only 23% say they have a long term plan[1],' said Laura Higgins, Senior Executive Leader for Financial Capability.

'Having a financial plan in place is key to getting on top of your finances', Ms Higgins said.

'Start by identifying your financial goals and what you want to achieve. Next you can consider the steps you'll need to follow to make them happen including how long it will take. You can use ASIC's MoneySmart TrackMyGOALS app to monitor your progress and ensure you remain on track', added Ms Higgins.

Here are ASIC’s MoneySmart New Year financial resolutions to make your money work for you in 2018. 

1.      Make a plan for your money

According to ASIC's research 9 out of 10 Australians are keeping track of their finances and 8 in 10 had a budget, with single parents with children at home (94%) and singles living in share accommodation (84%) the most likely to report having a budget[2].

Having a plan in place to manage your money will help you track your spending and understand your money habits. 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. ASIC's MoneySmart TrackMySPEND app can help to manage your personal expenses on the go. 

2.      Take charge of your debt

Get your finances on track in 2018 by taking control of your debts, including any credit cards which may have been over-used during the festive season.  You can start by making extra repayments on your smallest debt and when you have paid it off move onto any other debts.

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 36%[3] of Australians 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.

3.      Create a savings balance

Having a healthy savings balance 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. If you're looking to save for something specific in 2018, such as a holiday, a home or a wedding, having a savings plan in place is critical to achieving your money goals. Use ASIC's MoneySmart savings goal calculator to work out how long it will take to reach your savings goals.

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.

 4.      Take stock of your insurance

Having the right insurance in place is a critical part of a financial plan, but it pays to shop around. It's important to review your existing policies to ensure they cover everything you want included and if they don't you can find a policy that does. Make a resolution to compare the policies offered by other insurers when your home or car insurance comes up for renewal to ensure you get the best deal.

5.      Maximise your super

Get to know your super and join the 77% of Australians who know exactly or roughly their superannuation balance[4].  You can do this by going to your super website or reviewing your super statement. 

If your super is spread across multiple funds you should consider combining multiple 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.

ASIC's MoneySmart New Year's resolutions are available at: https://www.moneysmart.gov.au/tools-and-resources/news/new-years-resolutions

Background

ASIC is the Australian Government agency responsible for financial literacy, consistent with its strategic priority to promote confidence and trust in the financial system.  ASIC works to improve the financial capability of Australians so they can develop the 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 people having access to tailored resources and tools, and addressing 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 trusted and impartial financial guidance and tools to help Australians of all ages manage their money and make informed financial decisions.