New Year resolutions wilt under finance debt
31/10/2011 
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If you are one of the thundering herd having trouble keeping those New Year’s resolution to save more and spend less, don’t worry, you are not alone.
A new survey shows that many Australians may be in the same boat. But many are now succeeding.
One in five Australians will give up on their financial New Year’s resolutions by Easter with most saying that it’s because the economy makes it too difficult, according to a survey commissioned by BankWest.
Higher interest rates and soaring rents are sapping incomes and making it tougher for Australians to pay down credit cards and put money away.
The key is sticking to a habit of putting a little bit away on a regular basis, BankWest head of marketing and products David Rose said.
“The cost of debt has gone up quite markedly in the last 12 months,” Mr Rose said.
“Starting and maintaining the discipline is crucial. If you do it month after month you clear the debt and build up nest eggs.”
At the start of the year, about half of Australians had set themselves a financial goal, the survey showed.
That figure rises to two thirds for the respondents aged between 18 and 34.
Some 39 per cent of people making financial New Year’s resolutions said they had intended to either start saving or raise the amount they stash away.
About a quarter were looking to reduce debts, while 23 per cent are looking to curb their spending
As for the people who gave up, about a quarter said it’s because saving or paying down debt was too difficult while 23 per cent say it’s because they have higher priorities.
“Financial matters can be quite complex,” Mr Rose said.
“It’s hard in our daily lives to sit down with clear head space to think through our finances.”
BankWest has teamed up with Gay Curtis, the writer of Smart Couples Guide to Money to launch a new section on its website getsaving.com.au to provide visitors with tips on how to meet their financial goals, Mr Rose said.
Meanwhile, we are not shying away from piling up debt.
Credit card debt rose to a record $39 billion as of the end of December, according to figures from the Reserve Bank of Australia.
Consumers are also starting to shake off November’s rate rise and have started to spend more.
Retail sales rose 0.9 per cent in January compared with 0.2 per cent increases in each of November and December.
“Consumers have started the year on a cautious note,” Commsec senior equities economist Craig James said.
“There may be some lingering effect from November’s rate rise.”
Higher interest rates have pushed some consumers over the edge.
According to the most recent statistics, bankruptcies nationwide rose a fifth to 6016 during the December quarter, while in NSW they jumped more than 30 per cent to a record 2244, according to data from the Insolvency and Trustee Service of Australia.
For most people though it doesn’t have to get to that.
“They think they are too far in debt or they don’t have enough money to set aside so they don’t even start” Mr Rose said.
“People who have got themselves into a bit of debt or don’t have a lot of surplus funds discount the fact they can do something, so never start.
Remember, little and often fill the bank balance [and also the credit card].
Source: AAP
Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers.
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