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New Year financial resolutions from ASIC’s MoneySmart – create a better financial future in 2016

ASIC is encouraging people to start the New Year with some positive financial resolutions following its new report which revealed that only about two in five Australians have a short-term financial plan in place, and only a quarter of those surveyed have a long-term financial plan.

‘Having a financial plan in place – ranging from a household budget to paying off debts to saving for retirement – is key to creating a better financial future in 2016 and beyond,’ Miles Larbey, Senior Executive Leader for Financial Literacy, said.

‘A great place to start your New Year’s financial plan is by visiting ASIC’s MoneySmart website for free, impartial guidance and tools which allow people to set, track and reach financial goals.

‘Every January, some of the most popular New Year resolutions people make are to get to grips with their finances, and ASIC’s MoneySmart can help you do this and achieve your financial goals,’ he said.

Here are ASIC’s MoneySmart New Year financial resolutions.

1. Track your spending

‘To manage your personal finances successfully, you need to know where your money is going,’ Mr Larbey said.

‘Use ASIC’s TrackMySpend app to record your everyday expenses, to see exactly what you’re spending your money on, and where you can make some changes to save or pay off debt quicker.

‘One in ten people now use a mobile app to track their spending, according to our new Australian Financial Attitudes and Behaviour Tracker report, and ASIC’s TrackMySpend app is a terrific, free tool that helps you do just that.’

2. Set a budget

‘A budget is the cornerstone of a financial plan, and according to ASIC’s research, about half of Australians who have a budget mostly stick to it,’ Mr Larbey said.

‘Become one of them by using ASIC’s MoneySmart interactive budget planner that can help you get started. Or download ASIC’s TrackMyGoals app, which allows you to set, track and reach your financial goals, the free app is easy to download from the App Store or Google Play.’

3. Take stock of your net worth and consider diversification

‘According to ASIC’s research, while four out of five Australians saved money in 2015, one in 10 investors said they lost money they couldn’t afford to lose,’ Mr Larbey said.

‘If you want to start investing this year, a good start isASIC’s MoneySmart golden rules of investing.

‘ASIC’s MoneySmart golden rules of investing cover important concepts like diversification and asset allocation, which are about spreading your money across a number of investments in order to manage the risk of losing all your money on one investment.

‘Use ASIC’s MoneySmart net worth calculator to take stock of your financial situation. By working out what you own and owe, you can work out how much you can afford to put towards a savings investment plan.

‘More savvy investors might like to take ASIC’s MoneySmart Investing Challenge to see how much they really know about the world of finance and investing,’ Mr Larbey said.

4. Control your debts

‘Getting your debts under control, like credit cards you may have over-used over Christmas, is a good place to start. An easy way to work out how you get on top of your debts in 2016 is to use ASIC’s MoneySmart credit card calculator,’ Mr Larbey said.

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

5. Maximise your super

‘Get to know your super and join the three quarters of Australians who know exactly or roughly their superannuation balance, by going to your super fund’s website or diarise some time to go through your annual super statement,’ Mr Larbey said.

‘A few simple things can make a big difference to the amount of money you will have in retirement, and the New Year is a good time to take steps. For example, consider combining multiple super accounts to save fees, review your investment options or, like 16% of Australians, make extra contributions to boost your nest egg.’

6. Pay extra on your mortgage

‘Join more than half of surveyed Australians with a home loan/mortgage who make extra repayments, this strategy can save thousands.

For example, a couple with a $400,000 mortgage could save around $50,000 and pay off their debt almost four years earlier by contributing $200 extra monthly,’ Mr Larbey said.

Use ASIC’s MoneySmart mortgage calculator to work out how you could pay off your mortgage sooner.

7. Review your insurance cover

‘Having the right insurance in place is a critical part of a financial plan, but it pays to shop around. Make a resolution to compare the policies offered by other insurers when your home or car insurance comes up for renewal in 2016,’ Mr Larbey said.

This has been written by ASIC. For the full media release please click here.