In the study of 1,000 Australians by ME, over half (52 per cent) said their income – or lack of – was the key barrier to achieving their 2020 financial goals, followed closely by the cost of living expenses (48 per cent).
The latest mid-year budget update from the Australian Treasury showed projected wage growth will fall from 2.75 per cent in the April budget to 2.5 per cent over the next two years, before returning to 3 per cent in 2022-23.
The Reserve Bank of Australia has previously noted wage growth of 2 and 3 per cent will be the new normal as the economy continues to suffer from ‘spare capacity’.
ME money expert Matthew Read said, “When incomes don’t rise in line with expenses, households find it more difficult to save, putting their financial goals under pressure.”
Other barriers to achieving financial goals cited by respondents include a lack of discipline (21 per cent), lack of financial knowledge (13 per cent) and a bad attitude (5 per cent).
Overall the study found a minority of respondents (25 per cent) said they were ‘very likely’ to achieve their goals, indicating a general lack of confidence in the ability of households to achieve their financial goals.
When asked to rank the importance of certain financial goals, the top five most important goals were revealed to be:
- Saving for a holiday, car or expense other than a home;
- Building up ‘rainy day’ savings;
- Saving enough to buy a property;
- Reducing expenditure on ‘expensive’ habits; and
- Not building up any more debt.
