For many Aussies, New Year is a time to set goals around money. Whether you want to boost your savings, reduce debt or move closer to owning a home, you’re not alone. Setting smart financial resolutions this year can give you the strategies you need for the rest of your life.
Whether you’re saving for a deposit or looking to pay off your mortgage sooner, having a solid plan makes your goals more achievable.
Why savings goals matter
Financial goals give direction to your savings. Without clear targets, it‘s easy for your income to disappear into everyday expenses. A quick lunch here, a night out here. Before you know it, you’re back to where you were before payday.
When you define what you’re working towards, each decision becomes more intentional. That trip to the bottle shop or the online shopping session gets put into a different light and you start to become a little bit more savvy with your spending.
The key is choosing goals that align with your life plans.
Set realistic goals
Big financial goals can feel overwhelming. If you’re starting at zero and want to save a $50,000 deposit, it can look like an almost impossible task.
Breaking those big goals down makes them more manageable. Instead of focusing on a large annual number, calculate what you need to save monthly or fortnightly.
Giving yourself a two-week buffer over Christmas, saving $50k means $1k a week for a year, $500 a week over two years or $250 a week over four. Whether these figures are realistic for you will depend on things like your income, whether a partner is contributing and your weekly expenses.
Tracking progress regularly helps you stay accountable and allows you to make changes if you need to – say if you get a pay rise or an unexpected bonus.
There’s also no shame in changing your goals. If you’re struggling to save for your goal, reduce the target or extend the deadline to suit your needs.
Example savings targets
To make things a little less vague and fluffy, here are a few Aussie stats to help you shape your goals.
- Try to save 5-10% of your monthly income. The average Australian household currently saves 5.2% of their income.
- If you earn $80,000 a year, this works out to $265-$530 a month. If you earn $100k, it’s $320-$640.
- Even if you’re saving for a house, it’s generally recommended that you build an emergency fund that will cover 3 to 6 months’ essential expenses. As things stand, 1 in 3 Aussies have less than $1,000 saved.
Standard deposits in Australia
The average deposit in Australia depends on where in the country you are and what kind of buyer you are.
Looking at the latest home loan statistics, a 20% deposit on the median property value is $128k in Australia. This ranges from $83,000 in the Northern Territory up to $156k in NSW.
However, if you’re a first-time buyer, you can now get a home loan with just a 5% deposit and not have to pay LMI. This makes it $32k for the standard Australian home, $20,750 in NT and $39,000 in New South Wales.
These figures should be achievable within a year, but remember that house prices are currently rising so it’s better to try to save a bit quicker or a bit more rather than trying to tease it out.
Read more: Tips for first home buyers
Goal: reduce everyday spending
With supermarket prices constantly rising (alongside supermarket profit margins), household spending continues to rise in Australia. Data shows Aussies spend about $200+ per week on groceries, as well as $300-$500 a month on dining out and takeaway coffees and up to $200 a month on entertainment like gigs and cinema visits.
On top of that, food wastage is soaring in Australia. Making more of an effort to meal plan, make lunches for work and even investing in a decent coffee machine can save thousands of dollars over the year.
Goal: plan out your finances
Instead of just saving cash, use structures that reduce the cost of your debts.
Look into things like credit cards (and how much interest you’re paying), switching your mortgage to a lender with better rates and setting up an offset account to help pay off your mortgage quicker.
Setting up the right systems can help make your savings a lot more pronounced.
Learn about budgeting systems
Saving money is about more than just saying you’ll delete the Sportsbet app and avoid your local coffee shop. Take the time to look at some popular budgeting systems and find one that you think will work for you.
Budgeting frameworks to consider
- 50/30/20 rule: 50% essentials, 30% lifestyle, 20% savings/debt repayment
- Reverse budgeting: Save first, spend later (automate transfers on pay day)
- Envelope budgeting: Put cash in envelopes for different categories and stick to those budgets for the month
Build strong habits
If you can build strong habits, the changes in your lifestyle will be built into your savings plans. A few small daily habits that could help you:
- Ask “shelve it, shrink it, scrap it” before buying – could you wait, decrease or purchase or just hold off entirely?
- Pack lunches instead of eating out during the week
- Check your subscriptions and pause/remove the ones you don’t use
- Compare providers for electricity, phones and insurance
Buying your home
By making a concerted effort to save for your deposit, you’ll put yourself in the strongest position to buy your first home. These tips go beyond that, though. By keeping them up long term, you’ll find that you can pay off your mortgage sooner or afford nice extras like an overseas holiday.
Think you’re ready to buy? Speak to one of brokers and get the ball rolling.
