How to slash spending and save a bundle in 2021
Many eager Australians will have already broken their New Year's resolutions but experts say it's not too late to start again.
Despite being already a couple of weeks into the New Year, setting goals for 2021 can still be achievable if they are realistic and thought through.
New research from financial comparison website Finder surveyed 1000 Australians and found the following:
• 83 per cent set themselves a New Year's resolution.
• 51 per cent want to shift weight - the most popular resolution.
• 42 per cent aim to save more money and spend less.
• 14 per cent want to get out of debt.
Investment bank analyst Elizabeth McConkey, 25, and her partner Tom Birkin, 23, who works as an electrician, are hoping to cut their joint spending down by about $200 a week.
"Instead of taking the bus from the bus stop at the front of my house that takes me straight to the office, I will walk 20 minutes to the station and catch the train which is cheaper," McConkey says.
"And Tom is planning on not stopping at the pub after work during the week which will save us too."
McConkey says they have about $25,000 in savings and are hoping to have about $50,000 tucked away by the end of 2022 to put towards a house deposit.
Finder's spokesman Taylor Blackburn says many Australians were "feeling renewed and ready to bounce back in 2021".
"There's no rule that resolutions have to begin on January 1, in fact setting them mid-month - once the haze of New Year has lifted - can even be preferable," he says.
"If you want to make these changes stick, set a clear goal and time frame and make sure they're realistic. Big changes take time."
Blackburn says starting with small steps is the key to breaking daily habits and understanding clearly what you're spending money on.
"Creating unrealistic expectations is setting yourself up for failure, try making small changes to your daily habits instead," he says.
During the pandemic many Australians were stashing cash in droves and at one point were saving about 20 per cent of their incoming money.
Many Australians also slashed their credit card debts, reducing overall balances to the lowest levels in more than 17 years with balances accruing interest below $20 billion.
Consumer finance expert Lisa Montgomery says January allows people to have more time to plan goals for the new year.
"If you are going to invest that time wisely it's good to invest in your finances and look at how you can save money, it's never too late," she says.
"Even by February it's not too late, making some change at any time of the year can make a difference."
But Montgomery says it's important to set realistic goals so you don't get disillusioned.
"If you know that you can save $100 a week then set it at $50 or $75 or whatever you think you can manage rather than setting targets which are unrealistic," she says.
"If it becomes too big we tend not to do it."
She also suggests setting up a separate savings account to stash any savings you make so it's less tempting to dip into them and spend.
SETTING YOUR SAVINGS GOALS
• Set aside some time to write out your goals.
• Be realistic, don't set a goal you know you can't achieve.
• Work out what you need to do each month to reach your overall goal.
• If you have a savings goal, set up a separate savings account.
• Automate your savings when you get paid.
• If you're wiping debt, work out a plan to pay it off in an achievable time frame.
Originally published as How to slash spending and save a bundle in 2021