New survey data revealed that COVID-19 has caused many Aussies to give themselves a 'financial health check' as they prioritise saving over travel.
The Financial Planning Association's (FPA) latest survey of 2,000 Australians has provided a snapshot of how some Aussies have fared throughout the difficult past 12 months.
According to the data, many people developed more positive financial habits in response to the pandemic.
More than half (52.4%) of respondents said hitting a savings goal was their top financial goal, followed by 44.4% wanting to go on a holiday.
Additionally, 32.4% of respondents want to pay off their mortgage.
Despite the challenges of ongoing lockdowns, such as 35% of people's income/work being affected and 34% not having enough savings to get through, more people feel they are in a stronger financial position.
When compared to 2020, more Australians have remained on top of their finances.
Specifically, changes included being more frugal about lifestyle choices (44.7% in 2021 vs 30.8% in 2020); increasing savings (43.9% in 2021); paying down debts (41.3% in 2021 vs 23.3% in 2020); and creating a budget to understand saving and spending (38.6% in 2021 vs 23.2% in 2020).
Disparities between men and women on saving
For those that didn't making big financial changes, some said that in hindsight, basic financial planning would have helped them out.
Between the men and women surveyed, changes that would have been prioritised were varied.
More men would have had a financial plan (11% of men vs 9% of women) but more women would have cut back on take-away food and non-essential items (21% women vs 16% men).
Additionally, more women would have prioritsed making a budget (43% women vs 34% men) and being more frugal (50% women vs 40% men).
However, men were more keen on saving (47% men vs 41% women); salary sacrificing into super (15% men vs 11% women); and investing money elsewhere (25% men vs 12% women).
Dante De Gori, CEO of the Financial Planning Association (FPA), said there is a unique opportunity for Australians to understand their finances and take charge of their financial future.
"This year’s edition of Money & Life Tracker has shown us almost a quarter of Australians did not have enough in savings to support themselves through the lockdown period," Mr De Gori said.
"However, the value of financial advice has clearly risen in the eyes of those facing significant challenges and uncertainty."
Survey results showed that more Australians are seeking professional financial advice and having a financial plan in place.
Top tips to be financially savvy
More people are feeling confident that Australia is on the 'road to recovery' (17.8% in 2021 vs 9.3% in 2020).
Fears about a recession have also gone down 4.1% when compared to last year.
The FPA provided its top three tips for turning 'hindsight into foresight' and being financially savvy:
- Managing your cash flow. This entails assessing your financial situation, paying attention to your savings, debt obligations, and identifying any cost-saving opportunities.
- Don't lose sight of the future. In this, FPA says to work out where you want to be in five to 10 years, and figure out how to get there by setting a timeline and milestones.
- The FPA also recommends making an appointment to talk with one of their qualified financial advisers.
"Australia is soon entering a new year of 'living with COVID' and it's promising to see a number of Australians are currently seeking advice from a professional financial planner or through a digital platform," Mr De Gori said.
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