Not many people can say they’ve been unaffected by COVID-19. Whether you’ve lost work, had hours reduced or been fortunate to maintain employment, COVID has been a wake-up call for how we manage our money and set financial goals.
Research1 by AMP in 2020, shows that the majority of us now believe it’s more important than ever to plan for a secure financial future. For the first time since the GFC, we’ve seen firsthand the devastating impact unforeseen events can have on our finances.
How are we managing?
Many of us are doing smart things such as:
- cancelling non-essential services (29%)
- reducing spending/expenses (25%)
- putting money aside for unforeseen events (42%)
But worryingly there’s been an increase in people relying on credit cards to pay for everyday expenses and taking out personal loans. And 23% of 18-35yr olds surveyed accessed some of their superannuation early.
How has it changed our goals?
For starters, more of us are actually setting goals than before COVID. It’s made us more determined to take control of our money and be better prepared for whatever life throws our way. And the goals we’re aiming for now are all about paying down debt and saving.
Goals we’re mostly on track for:
- reduce my spending/expenses (73%)
- pay off the mortgage (65%)
- pay off personal loan/credit card (61%)
- put extra money aside for retirement (60%)
However, the COVID curveball has meant we’ve had to do a bit of fine-tuning. We’re extending the timeframe it’ll take for us to reach our goal, or we’re abandoning it altogether if it no longer suits our situation.
Goals we’re postponing or abandoning:
- saving for an investment property (43%)
- saving for a big-ticket item like a holiday (40%)
- investing in the stock market (35%)
- saving for a house deposit (31%)
Goodbye holiday, hello rainy day
Pre-COVID, saving for a holiday was a priority goal for almost half of us. Whether it was an annual trip overseas or regular cheeky getaways, Aussies were big travellers. But with the world shut down and travel greatly restricted, we’re realigning that goal to something that makes us feel more secure – saving for a rainy day.
Because we’re more focused on saving, we’re watching our spending more closely too. Things we used to think we needed have been recategorised as nice-to-haves. And it’s not just the overhanging threat of job losses that have made us feel this way. Stay at home orders and have allowed us space to take stock and start appreciating the simple things in life once again. We’re valuing time with our family, a slower pace, and being debt free over buying things for the sake of it, or that we might not be able to afford.
Whatever your situation, now could be an ideal time to revisit your financial goals and decide if they’re still right for you.
1 AMP Financial Wellness Report, Behavioural Architects, August 2020
According to the research…
have stopped saving for a house deposit
are still on track to reduce their expenses and spending
are no longer saving for a holiday
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