What is your money mentality? – Smart real estate investment

A recent study of over 1,000 people by National Australia Bank (NAB) identified how most Australians view and manage their finances, and it offers insight into Australians’ spending and saving habits – as well as how they can better manage their finances. money.

dollar-stretchers watch their spending carefully and often struggle to make ends meet.

Goal-oriented savers work hard to reach their savings goals, but whose habits may change once they reach a specific goal.

Impulsive spenders enjoy a variety of experiences but are not interested in long-term planning.

Regular savers enjoy saving money and derive satisfaction, safety and security from watching it grow.

Rachel Slade, NAB Group Director for Personal Banking, observed that income does not affect how a person handles money.

“Our research and interviews have shown that money mindsets are not dependent on income. Instead, they’re influenced by milestones like getting married, having a baby, reaching a financial goal, or a change in financial circumstances,” she said.

With that in mind, NAB has suggestions on how people can manage their finances based on their mindset, by first identifying their mindset.

Dollar holders know very well where their money is going. Their income is spent on necessities such as food, rent, and transportation, as well as paying off debt, leaving little or no money for discretionary spending. These are excellent budgets. They also frequently rely on credit to cover day-to-day expenses and may be concerned about their finances.

The “dollar-stretchers” should first consolidate the loans. They can take out new loans at lower interest rates and pay off the smallest debt first. They should also start saving for an emergency fund in regular, small installments as soon as they can. In an emergency, they need to know that assistance is available.

Goal-oriented savers can easily set aside money for a specific purpose, like a public holiday. When they are highly motivated, they will reduce their expenses while increasing their income through extra shifts or side activities. They also use financial windfalls such as bonuses and tax refunds to stimulate savings. However, they may be hesitant to commit to a long-term savings goal, such as a down payment on a house. Moreover, unexpected expenses can prevent them from reaching their goal if they do not have a savings cushion.

Goal-oriented savers should create a savings plan as well as a savings goal. Separating the savings goal account from other funds, such as an emergency fund and checking accounts, can be beneficial if they use no-fee accounts. When they get paid, they can either deposit some directly into a savings account or set up an automatic transfer based on what’s left at the end of the pay period.

Impulsive spenders prioritize discretionary spending and instant gratification. In some cases, they may even forgo paying their bills. They are unlikely to have long-term financial goals, and they are usually motivated to reward themselves. Interestingly, they can become goal-driven savers if a goal interests them enough.

Impulsive spenders should refrain from unnecessary purchases. This is especially important during the first week of a monthly pay cycle to ensure they have money at the end. They must separate their savings account from their discretionary funds. They also have to leave the items in their online shopping cart for three or five days to determine if they really need or need them.

Habitual savers live modestly and seek bargains because they want to control their lives and be safe. They allocate savings early in the payroll cycle and are likely to “spread” the funds. However, they may overcommit and run out of funds for day-to-day expenses. They are most likely saving for a down payment on a house or property and have an investment strategy. They access personal finance advice from various media and have financial models.

Habitual savers need to plan the month so as not to overestimate their savings. They should keep in mind that unexpected expenses sometimes occur and they should identify large one-time purchases whenever possible. They need to plan their next step, like investing and setting a goal to help them reach it.

For Australians considering saving for the year, Ms Slade advised: use budgeting tools, consider what is appropriate for their current situation and seek independent legal, financial and tax advice.

What is your money mentality?

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Last updated: January 13, 2022

Posted: January 14, 2022