Very few Australians save and even fewer invest their money

According to a recent report by financial adviser Perpetual Private, 57 per cent of Australians believe their finances are stopping them from pursuing their plans for the future, with 34 per cent saying they think about their money situation constantly.

The research titled What do you care about?, which surveyed 3,000 Australians, found that Australians list their financial position as one of the top three things they care about in life, next to family and personal health.

As a result, 57 per cent indicated they checked their account balances frequently, while 46 per cent avoided making unnecessary purchases, and 45 per cent sought out discounts when shopping.

However, despite this concern, only 27 per cent of those surveyed were found to have established goals for their savings, and just 11 per cent had a regular investment plan.

Gary Lembit, senior manager of client insights and analytics at Perpetual, said Australians must allocate time to create a plan for their finances in order to achieve their long-term goals.

“If you have a resolution around your finances, write down your goals and develop a plan with actionable steps to get you there,” he said.

“Put thought into your likely income and expenses over the long term, the value of the things you want and how much time and wealth you are willing to commit to achieving those things.”

Mr Lembit said it is fundamental that Australians acknowledge the cost of the milestones they hope to face in their lifetimes in order to establish investment strategies that will provide them with the level of returns needed.

“It is beneficial to evaluate your life goals around important questions such as: How much will it cost to live in the area you want to? What level of education do you want to provide your kids? These are big milestones requiring significant investment. So thinking about life goals early is important,” he said.

“Planning how much you will need to accumulate to realise them is going to give you a tremendous amount of financial relief."

Here are Mr Lembit’s top tips for individuals set on organising their finances:

• List and value all your assets, including real estate, retirement savings, shares, vehicles and even jewelry;
• Compose a budget and monitor your expenses. He recommends a variety of applications that can be used to track your savings and spending habits;
• Decipher your key life goals and understand the costs. Mr Lembit advises considering the type of dwelling you want, its location, your desired family size and their likely education needs etc;
• Top up your superannuation with additional contributions;
• Write down your debts, including your mortgage, credit cards, loans etc;
• Put any additional or unexpected funds you come by into paying down your debts;
• Approach a financial adviser about creating an investment strategy; and
• If retirement is on the horizon, consider estate planning and allocate beneficiaries on your financial accounts.