Can’t buy me love? Aussies prioritise finances over romance in 2021

Can’t buy me love? Aussies prioritise finances over romance in 2021

2020 may have hit our economy hard, but it’s also taught millions of Aussies financial lessons, according to new research from ING.

ING Research shows that around 2.9 million Australians have reported feeling more financially prepared than ever for 2021, with many prioritising “financially fit” goals over romantic ones for the new year.

Over a third of Aussies (36 per cent) said being financially fitter was their biggest priority for the year, followed by overcoming debt (32 per cent). Interestingly, personal finance appears to be more important than finding love, with only 11 per cent claiming this as their biggest priority.

The impacts of COVID-19 on the Australian economy saw a rise in unemployment across the nation, as millions of homeowners were allowed to pause mortgage repayments and credit card repayments due to financial hardship.

It therefore may not be surprising that the financial stress caused by COVID-19 could have forced Aussie singles to prioritise money over love.

Aussies setting better financial habits thanks to 2020

Key findings from the ING research include:

  • A quarter (25 per cent) of Aussies claimed to have become more financially literate over the last 12 months, and 70 per cent believe they’re prepared financially for 2021.
  • One in three (34 per cent) Aussies have less debt (excluding mortgages) than 12 months ago.
  • Two thirds (68 per cent) of Aussies now feel more comfortable talking about their personal debt, with millennials (76 per cent) reportedly the “most open” generation to discuss this previously taboo topic.
  • Aussies are reporting new financial habits, with over half reducing unnecessary spending (52 per cent).

 

These findings are in line with the latest data that shows Australians are creating better financial habits.

The Reserve Bank of Australia reported falling debt-accruing-interest on credit cards across the country for most of 2020 (outside of the pre-Christmas period). Further, Australians managed to squirrel away over $100 billion in deposits since COVID-19 hit (March – November 2020).

Fiona Prater, ING’s Head of Consumer Lending, said: “What this research suggests is that the pandemic has made many Aussies take the positive step to re-evaluate their financial position, making them more prepared for any future financial uncertainty.

“In fact, a quarter of respondents say that over the past 12 months they have become more financially literate and understand their personal finances better,” said Ms Prater.

How to set healthy financial habits for 2021

Whether your new financial habits are out of survival due to financial struggles in 2020, or you’ve been shaken by what has happened to others and want to improve your finances, there are a few healthy habits anyone can pick up in 2021.

  1. Make a budget and stick to it. It’s not hard to make grand claims about how you’ll divvy up your income each month, but actually sticking to a budget is another story. If you find your expenses are growing each month, consider using app-based budgeting tools that can help label your purchases and encourage you to stay on track. Or, if you struggle with not dipping into your savings, consider switching to a conditional savings account that will penalise you for doing so. This may help incentivise you to stop.
  2. Get on top of your credit card debt. Make 2021 the year you finally begin chipping away at that pesky credit card debt. Make more than the minimum repayments and consider allocating more of your budget to paying down your balance in full once and for all. If you need a little breathing room away from interest charges, consider if a balance transfer offer may suit you.
  3. Regularly compare ongoing expenses. Not sure if your current utility provider or phone carrier is still offering you the best deal for your finances in 2021? It’s time to shop around and compare your options. Many providers change their plans and their prices frequently, with more affordable deals typically offered to new customers. Look around and see if you can nab a better deal and keep your bills down in 2021.
  4. Regularly compare your insurance cover. It’s not just your phone plan that could be costing you more in 2021. If you have home and contents, car or even health insurance, consider comparing a few different insurance offers to ensure you’re still getting the best deal for your personal and financial situation.

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Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What are the requirements of an ING Bank locked savings account?

An ING bank locked savings account - also called a term deposit - offers you interest in exchange for holding your money for a period of time.

The terms offered include as little as 90 days or as long as two years. Generally, the longer you lock your money away, the higher the rate of interest. 

The minimum deposit amount for an ING locked savings account is $10,000. 

To be eligible to apply, you must: 

  • Be an Australian resident for tax purposes
  • Be aged 13 years or older
  • Hold the account for personal use (ING offers business term deposits as a separate product). 

 

Should I open multiple savings accounts with UBank?

UBank offers customers an opportunity to make the most of their savings by opening multiple savings accounts. Having multiple savings accounts with UBank may be ideal for savers tracking different goals in separate accounts. 

It’s important to note that to earn bonus interest, you will still need to meet the conditions of the UBank savings account every month. If you don’t make these deposits, you will receive the standard interest rate, which is typically lower. 

Keep in mind that you won’t earn bonus interest on your UBank savings account in the month an account is opened and if you open multiple savings accounts with UBank, you'll start earning any bonus interest the following month. 

It's also not yet known how long the special interest rate will hang around for, so please check with your bank for more information. 

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.