CBA’s Chief Behavioural Scientist, William Mailer said: “It’s great to see so many Aussie’s prioritising financial health as a major goal for 2022. But while having good intentions to save is one thing it’s often not enough, and broken resolutions are unfortunately common come February.
“It’s really important to think about how to turn intentions into recurring behaviours and actions. Using the right technologies, tools and services to make good savings behaviours automated and attractive, can really go a long way to turning good resolutions into great outcomes.”
According to the CBA research, savings and budgeting are the top financial resolutions people are planning for.
Top financial resolution: Savings
Encouragingly, the research found more than seven in ten Australians plan to save this year, with travel, property and investment goals topping the list of reasons to save.
After more than 18 months of restricted travel, it would appear many Australians are planning to take a break-away from home, with 32 per cent of Aussies planning to save for travel-related expenses. Interestingly, across all age groups, travel was highlighted as the number one ‘reason to save’.
When comparing this research to CBA data, “holidays” was the third most popular ‘goal category’ created in the bank’s Goal Tracker tool in both 2021 and 2020.
According to the research other top categories people are saving for include:
- saving to invest more (20 per cent)
- saving for a new car or vehicle (19 per cent)
- and saving for a property (i.e. deposit / purchase) (16 per cent).
The CBA research shows one in three (32 per cent) of 18 to 29 year olds are saving for property. Overall, women are slightly more likely to save for property than men (18 per cent vs. 14 per cent respectively).
According to CBA data, “property” was the second most popular goal category created in the bank’s Goal Tracker tool in 2020 and 2021.
Saving to invest also ranked highly among younger Australians (18 – 29 year olds) at 31 per cent, according to the research.
In general, men are slightly more likely to save for investment purposes than women (22 per cent vs 18 per cent respectively).
While the research shows men are more interested in saving to invest, recent CommSec data shows interest from female investors is growing – with women representing 44 per cent of total new account openings for CommSec Pocket, up from 31 per cent pre-Covid.
Top behavioural shifts in 2022: Budgeting
Overall, it would appear many Australians are keen to shift their behaviours to improve their finances in 2022. The top habits people are looking to improve relate to budgeting and include:
- Spending less on things I don’t need (49 per cent)
- Spending less on eating out, takeaways and nights out (29 per cent)
- Reviewing contracts and bills to ensure I’m getting the best value (24 per cent).
The top behavioural shift of ‘spending less on things I don’t need’ is being driven by women, with 55 per cent of women planning to do this in 2022 compared to 43 per cent of men.
Mr Mailer said there are a number of simple yet effective behaviours that can lead to better financial outcomes.
“Modern technology has made it incredibly easy to spend on transport, take-away, clothes and video streaming – all from our couch, and sometimes in ways we regret. The idea is to better understand what it is about these technologies that make it so easy to spend, and use these same insights to make is easier to save, invest and meet other financial goals,” he said.
“A lot of new financial technologies and services are designed with this in mind. They are easy to sign up to, and to stick with over time. They provide good incentives and feedback as we progress to our goals, and better suit our increasingly complex financial lives.
“We’re excited continue to play a leading role in developing these technologies over the coming years. This research shows that there is certainly demand.”
CBA’s top tips and tools to set Australians up for success in 2022 include:
- Be specific – “Vague or unrealistic financial goals can make it difficult to know where to start, or how to progress. Break goals down into specific actions and behaviours – including how, when, where. For example, rather than saying “this year I’m going to spend less” you might say: “on the first of each month, at my kitchen table after dinner, I’m going to print off all my subscriptions from my banking app, review each subscription, and immediately cancel those that I no longer need,” Mr Mailer said.
- Make it automatic – “Goals that rely on will-power or memory don’t have as much success as we might like to think they will. Automate good savings behaviours so they can occur on time, automatically and without you having to fight temptation every time. Synchronise savings or investment transfers to payday to make it easier to ensure funds are available, and allocate money to your goals first. Set reminders for other important behaviours that can’t be automated,” Mr Mailer said.
- Be realistic, and anticipate challenges – “Although it’s tempting to set resolutions that are ambitious, such as running a marathon this year when you’ve never run a race before, it’s important to be realistic and set resolutions that are more achievable. When we fall short of our goals, it can be tempting to throw in the towel completely, and snap back to bad behaviours. Anticipate that there will be times when it is hard to stick to our best plans, and create plans to get back on track. Remember, a lot of our Christmas bills will come in, in January!” Mr Mailer said.
- Change your environment – “So much of our financial behaviour is influenced by our environment. Our habits, social circles and environments (both online and offline) can influence how we spend and save. Spending more time with friends that have similar financial goals, avoiding the shortcut through the shopping centre on the way home, and managing social media alerts can all make it easy to avoid regret, and create the right influences on your financial behaviours in 2022,” Mr Mailer said.
- Reframe the decision – “Behavioural research shows the way financial decisions and opportunities are presented to us can make a difference on what we will sign up to. In one US study, participants were much more likely to sign up to a savings plan that allowed them to save $5 a day, than one that asked them to save $35 per week, or $150 per month. We are also more likely to set up new goals at ‘fresh start’ moments (like the start of a new year or birthdays) as it feels easier for us to psychologically draw a line between our old and new self. Break down big goals into small achievable building blocks and synchronise actions with moments that feel easier to start saving – for example payday, tax time, birthdays. Simply labelling accounts with saving goals can also make it feel a little bit harder to dip into these accounts for other tempting spending,” Mr Mailer said.
Notes to editors
About the CBA research
- Fieldwork was conducted by House of Brand Group between 1st December – 8th December 2021, amongst a sample of n=1,005 nationally representative respondents with quotas set on age, gender and location.
Key insights from the fieldwork include:
- Seven in ten Aussies will make a financial resolution this New Year, with savings the key goal.
- Top financial new year’s resolutions include:
- Spend less on things I don’t need (29 per cent)
- Be better at saving money (26 per cent)
- Improve my financial wellbeing/outcomes (22 per cent)
- Be better at budgeting/setting budgets (21 per cent).
- 9 in 10 of 18 – 29 year olds will have a financial-related New Year’s resolution, compared to 1 in 2 of over 50 year olds.
- 61 per cent of men said they will have a financial resolution compared to 76 per cent of women, with 21 per cent of men and 38 per cent looking to spend less of things they don’t really need. 7 in 10 Australians are planning to save this year, with the most popular reasons to save being:
- travel (32 per cent)
- investing more (20 per cent)
- buying a new car or vehicle (19 per cent)
- buying a property (16 per cent).
- For those planning to save in 2022:
- For the 18 – 29 year olds, around 1 in 3 are saving to travel (36 per cent), buy a new property (32 per cent) or invest more (31 per cent)
- For the over 50 year olds, around 1 in 3 are saving to travel (33 per cent), while around 1 in 10 are planning to buy a new property (8 per cent) or invest more (11 per cent)
- About one-third of men (31 per cent) and a quarter of women (25 per cent) are not saving for anything in particular, followed by saving for property (14 per cent of men vs. 18 per cent of women) and saving to invest more (22 per cent of men vs. 18 per cent of women).
- The top planned financial behavioural shifts for 2022 are:
- Spend less on things I don’t need (49 per cent). This was driven by women, with 55 per cent of women planning to do this in 2022, compared to 43 per cent of men
- Spend less on eating out, takeaways and nights out (29 per cent)
- Review contracts and bills to ensure I’m getting the best value (24 per cent).
About the CBA data
- Data from the Goal Tracker tool in the CommBank app shows:
- 498,000 goals were created in 2020 and 445,000 goals were created in 2021
- The three most popular categories of goals created were:
- 2020: Purchase (15 per cent), Property (13 per cent), and Holiday (11 per cent)
- 2021: Purchase (16 per cent), Property (14 per cent) and Holiday (7 per cent).
About the Goal Tracker tool in the CommBank app
- In 2019 Commonwealth Bank used behavioural insights to launch the Goal Tracker tool in the CommBank app to help customers save towards a particular goal
- The Goal Tracker tool allows customers to set and reach their goals more easily, breaking savings goals into less overwhelming weekly targets with automatic and adjustable payments
- Find out more.