Top Financial Goal For 2023: To Reduce Living Costs and Expenses
With cost of living pressures top of mind, new consumer research released by Commonwealth Bank reveals Australians are looking to reduce expenses, increase savings and lift their incomes as part of their New Year’s resolutions.
The research highlighted:
- 9 in 10 (93 per cent) Australians have a financial goal for the New Year
- 1 in 2 (51 per cent) say their top financial goal is to reduce living costs and expenses
- 1 in 2 (50 per cent) want to spend less on non-essential items
- 4 in 10 (41 per cent) wish they were more disciplined to save more regularly
- 4 in 10 (41 per cent) want to find ways to earn extra income
CBA Chief Behavioural Scientist, Will Mailer, said: “It’s that time of year when millions of Aussies will make New Year’s resolutions to get on top of their money, get in shape, or to live a greener lifestyle. Sadly, we also know that a huge number of these resolutions won’t make it to February, as statistics historically show that many of us fall back into old habits in the first weeks of the year.”
Mr Mailer said CBA’s Behavioural Science team is constantly analysing data, working with research partners and developing new tools and services to help customers achieve their financial goals.
The CommBank app now includes a range of services to help with feedback on spending (Transaction Notifications), cap spending (Lock, Block and Limit), set and pursue goals (Goal Tracker), find unclaimed money (Benefits Finder) and see what bills are around the corner (Bill Sense), and noted some strong results had been achieved through the Bank’s Goal Tracker savings tool.
“Behavioural scientists have spent decades looking at why we so often plan to make lifestyle improvements, only to then overspend on the weekend and skip our gym visit. These insights help us to set up strategies that will increase the likelihood that those health, wealth and professional goals actually become regular behaviours and stick over time,” Mr Mailer said.
“We are certainly seeing demand for tools and services that help people to more consistently follow through on financial goals. New data from our CommBank app shows the number of new goals created via Goal Tracker in 2022 was 30 per cent higher than 2021. Critically, the data also tells us that 8 in every 10 of those saving goals was achieved.”
Mr Mailer said any time of the year could be a good time to set a new financial goal, but behavioural science research shows that ‘fresh start’ dates like January are among the most popular periods.
With the New Year nearly here, Mr Mailer has shared five practical tips to help Australians achieve their 2023 resolutions.
New Year’s resolutions: 5 practical tips from Chief Behavioural Scientist Will Mailer
- Avoid big and vague, focus on specific. “One of the mistakes we make is to be too vague in our resolutions. Saying we want to ‘get in shape’ or ‘get on top of our money’ is very hard for us to track, and does not provide a good starting point. Break down big goals into the one or two very specific behaviours that you will need to change. This might be saving a certain per cent of your pay each payday or to limit online shopping to a set day each week, with a nominated weekly spend limit. Where possible set up ways to track and measure these behaviours over time”
- Create ‘if-this-then-that’ rules. “Behavioural science research has showed that follow-through rates can be higher when we are specific, not just about the goal itself, but how, when and where we plan to get there. Rather than saying you will spend less on unnecessary items, you might say that on the first Sunday of each month, I will reserve 60 minutes between 3pm and 4pm to review and cancel any unwanted online subscriptions at my kitchen table. This helps to anticipate any barriers to success, and builds the right cues into our lives for our desired behaviours.”
- Build in incentives. It can be easy on New Year’s Eve to think about all the big changes you will make in January, but it’s another thing when that time rolls around and we have to take the difficult or boring actions to make it happen. One strategy that behavioural scientists consider is the use of commitment devices, or putting incentives in place to help your future self to follow through. For example, you might agree with your partner, that you will do the dishes for a week every time you miss your monthly budget target!”
- Disrupt your environment. “Habits experts show that one of the best times to start a new habit is at a time of change in our lives. This could be moving house, changing jobs, or returning to a new work setup after summer break. It is a chance to reset our environments and set new habits with new triggers, rewards and feedback. Take advantage of the summer break, to shake-up your 2022 work rituals. You might plan for a new desk or commute close to the park rather than the shops, or a new project team that brings their lunch to work each day.”
- Willpower is not enough. “Another common mistake is that we rely too much on willpower when setting goals for the New Year. Willpower can be great to help us get started, but often we can get overwhelmed when we’re exposed to temptations or when our internal autopilot takes over. It’s important to capitalise on the strong willpower up front to set up systems around us that will help us to sustain good behaviours, like setting up auto-transfers on our savings, subscribing to a health food delivery service or disabling alerts on our social media accounts.”
Where you can access help
Commonwealth Bank recently launched a cost of living hub with helpful ways to offset the rising cost of living.
We are focusing on providing customers with the right tools, features and services to help them as they navigate the changing economic landscape. Money Plan, Spend Tracker and Goal Tracker in the CommBank app can help customers stay on top of their financial decisions, understand where their money is being spent, and set and reach their savings goals.
We are also seeking to help customers put money back in their pockets, with shopping offers and cashback via CommBank Rewards, and through the use of tools like Fuel finder and Benefits finder.
If you are concerned about your financial situation, message us at any time in the CommBank app and we will connect you with our Financial Assistance Solutions Team.
Source: Commonwealth Bank