Aussies Urged To Practice Financial Literacy

The end of Australia’s inaugural Money Smart Week has brought the importance of financial literacy to the fore, in a bid to help households struggling with household debt increase their savings coffers. Financial coaches maintain that finances are easier to manage if you break projects down into small, easy steps and only try to tackle one at a time. Because money is a source of stress and anxiety for so many people trying to take on too much at once can make it overwhelming, one of the major reasons why so many people fail.

Coaches recommend making use of the online tools and Apps available but to beware those that have commercial motives and just want to take advantage of consumers. Make sure you get advice from objective sources, especially if you are not looking to spend anything and consider looking into non-government organisations that offer free financial counseling services.

Experts also recommend using financial “events” or milestones to their full potential and using the opportunity to learn more. Your tax refund is a good example of how you can expand your understanding periodically, as are your savings accounts and policy renewals. Savings accounts, for instance, can be compared online via Bankwest, at http://www.bankwest.com.au/personal/savings-term-deposits/savings-term-deposits-overview, and finding the deposit with the right terms and fees for you will help you save more.

Consumers are also urged to remember that every little bit counts, in respect of both saving and spending. Note-breaking is a notorious way to dissolve money as the change is usually wasted on frivolous purchases. Being able to cut back is going to be important in the coming months as the mining industry slowdown is expected to have a carry-on effect for other markets.

While the last three months have seen a 0.6% growth in the local economy and a 3.7% increase over the course of the last year, consumers have remained cautious when it has come to spending and saving. The conservatism has been attributed to influences from the Chinese and European markets but a strong currency, an increase in imports and a decrease in exports is expected to take its toll on the economy.

Research tells us the number of accounts with real net disposable income has shown the smallest growth since 2001, other than during the aftermath of the global financial crisis. Net disposable income is used as an indicator of national wealth and its slowdown has some economists concerned.

Household expenditure shrank back to 0.6% during the June quarter, the month that $2.8-billion was paid out by the government in carbon tax compensation, a phenomenon that has surprised analysts. Savings also continued to notch its way up the priority list for a growing number of households, from 8.9% to 9.2% in the June quarter.

The growth figures are in spite of 1.2% declines in resources and 1.4% declines in manufacturing as iron ore, Australia’s biggest and most valuable export reached all-time lows. Despite the trying times the economy has $260-billion in resource developments to look forward to, which do not appear to have been affected by the poor economic performances in the mining sector of late.

The government has taken the opportunity to be vocal about its economic status, as public financial pressures have continued to mount for a number of households. Treasurer Wayne Swan has pointed out how the government has been successful in its own savings efforts, enabling it to create the scope for new priorities to be addressed, despite challenging financial times.

The new growth figures are hoped to give rise to renewed positivity and consumer confidence across all markets and by practicing a little financial literacy, consumers can still keep themselves afloat under the prevailing financial pressures. The key to survival is saving and Aussies are urged to cut back on unnecessary purchases and to boost their savings efforts instead.