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Achieve your savings goals for 2023 with Money Meditations

07 February 2023
• 3 minute read
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Unless you live off the grid, you’ll be aware that 2022 was a financially challenging year for most. With eight successive interest rate rises and inflation hitting highs not seen for 30 years, nearly everyone will have felt the pinch one way or another.

As part of our efforts to help you navigate this unprecedented economic climate, we created Money Meditations. Our initial research involved surveying a selection of Great Southern Bank customers about their financial hopes and concerns for 2023. And we’re pleased to say that despite the doom and gloom in the media, Australians are nothing if not an optimistic bunch.

No less than 86% of respondents said they had a specific savings goal in mind for the year ahead. Asked what they were saving for, the joint most popular answers were a home deposit and a holiday, with home renovations and a new car not too far behind.

Despite this, we know that while new year’s resolutions are easy to make, they’re just as easy to break. So, whether you’re looking for a savings account with bonus interest, guidance on how our clever savings tools The Boost and The Vault work, or you’ve just overspent at Christmas and want to consolidate your debts, there’s a Money Meditation for you!

How financially literate are you?

While Money Meditations can help you achieve your savings goals, it’s no substitute for a basic level of financial literacy. Around the time we were polling our customers, the Melbourne Institute of Applied Economic & Social Research was surveying a much larger cross-section of the population with a series of money-related questions.

Based on answers given by 17,000  people, the recently released Household, Income and Labour Dynamics in Australia survey revealed some surprising results.

Here are the five questions asked in the survey, along with the results. Answers can be found underneath. Why not see how you stack up against the average?

Question 1. Numeracy (Pass rate: Male - 90.7%; Female - 79.5%)

Suppose you put $100 into a no-fee savings account with a guaranteed interest rate of 2% per year. You don’t make any further payments into this account, and you don’t withdraw any money. How much would be in the account at the end of the first year once the interest payment is made?

Question 2. Inflation (Pass rate: Male - 77%; Female - 63.8%)

Imagine now that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, would you be able to buy more than today, exactly the same as today, or less than today with the money in this account?

Question 3. Diversification (Pass rate: Male - 77.4%; Female - 72.6%)

Do you think that the following statement is true or false? “Buying shares in a single company usually provides a safer return than buying shares in a number of different companies”. (True or false?)

Question 4. Risk–return (Pass rate: Male - 87.8%; Female - 79.4%)

Again, please tell me whether you think the following statement is true or false: “An investment with a high return is likely to be high risk”. (True or false?)

Question 5. Money illusion (Pass rate: Male – 77.5%; Female - 73.3%)

Suppose that by the year 2024 your income has doubled, but the prices of all of the things you buy have also doubled. In 2024, will you be able to buy more than today, exactly the same as today, or less than today with your income?

The answers

  1. $102
  2. Less
  3. False
  4. True
  5. Exactly the same

More help is at hand

As you can see from the results, a significant proportion of Australians were unable to answer the questions correctly. If you’re one of them, don’t worry! Not everyone is born with the financial literacy gene. That’s why we have an extensive selection of online calculators and blog articles to help you understand your situation better.

And the good news is, when you combine understanding with motivation, the sky’s the limit!

Important Information

Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959, AFSL and Australian Credit Licence Number 238317. Conditions, fees and charges apply. This is general information and does not take into account your objectives, financial situation or needs. Consider the appropriateness of the information, including the Terms and Conditions (T&Cs) booklet, before acting on it. The Financial Claims Scheme may apply to this product; refer to the T&Cs for more information.

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