Do you consider yourself financially savvy? If the answer is yes, you are not alone.
According to Mortgage Choice’s Australian Financial Savviness Whitepaper1, 77.2% of Aussies consider themselves to be good with their money.
So what do ‘financially savvy’ Australians do with their money?
In this article, we look at the top financial tips and hacks that ‘money smart’ Australians employ.
1. Check bank accounts at least once weekly
More than 60% of financially savvy Australians say they check their bank accounts at least once weekly. It’s important to review your finances on a regular basis so that you’re aware of where your money is going and how well you are saving. With most banks offering online banking through mobile apps these days, it’s easy to keep tabs on your accounts with the touch of a button.
2. Use a budget
Nine out of ten money smart Australians manage their finances by using a budget. Budgeting helps you to plan your spending and take control of your finances rather than living pay day to pay day. If you have never utilised a budget, it’s never too late to start today. A good budget should include your regular earnings and outgoings such as phone bills, mortgage payments and groceries.
3. Save more than 10% of your income for ‘rainy day’ expenses
Nearly 70% of financially savvy Australians actively put more than 10% of their income away for ‘rainy day’ expenses. No one can predict unexpected events, but you can prepare for them by regularly putting a portion of your salary into an emergency fund. This will also reduce your reliance on credit cards and/or personal loans should you suddenly need money.
4. Pay off credit cards in full each month
About 70% of financially savvy Australians say they ensure their credit card is paid off in full each month. Paying with plastic is undoubtedly convenient and easy, but if it’s not kept in check, it can lead to unwanted debts. Therefore, it’s a good idea to pay off as much as you can every month to reduce the interest, and you should also take advantage of interest-free periods if they are available.
5. Research financial options before making decisions
According to the whitepaper, 68% of money smart Australians say they thoroughly research their financial options online before making any final decision. You can potentially save money and nab a good deal just by doing your homework, particularly if you’re making a large financial decision such as buying a property or a car. Always do plenty of research and speak to a professional if you need further advice.
Taking steps to be more financially savvy has many benefits. Our research showed that financially savvy Australians are two times more likely to live a comfortable retirement and 1.5 times more likely to have emergency funds saved.
In short, being financially savvy means you will be able to cope with life’s various hurdles as and when they occur.
If you want advice on how to improve your financial wellbeing this year, make an appointment to speak to your local FinChoice financial adviser.
You might also be interested in:
- Australian Financial Savviness white paper
- Top tips for your life stages
- How to build your foundations for financial wellbeing
1Australian Financial Savviness Whitepaper – December 2017. 1043 Australians were asked about their attitudes towards money and finances.