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Will low wage growth stop Aussies from reaching their financial goals?

By Cameron Micallef · January 03 2020
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Will low wage growth stop Aussies from reaching their financial goals?

By Cameron Micallef
January 03 2020
Reading:
egg
will low wage growth stop aussies from reaching their financial goals

Will low wage growth stop Aussies from reaching their financial goals?

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By Cameron Micallef · January 03 2020
Reading:
egg
will low wage growth stop aussies from reaching their financial goals

Inadequate income and the high costs of living are providing barriers for Australians who have put financial goals top of mind in the new year, according to a major bank.

In the study of 1,000 Australians by ME, over half (52 per cent) said their income – or lack of – was the key barrier to achieving their 2020 financial goals, followed closely by the cost of living expenses (48 per cent).

The latest mid-year budget update from the Australian Treasury showed projected wage growth will fall from 2.75 per cent in the April budget to 2.5 per cent over the next two years, before returning to 3 per cent in 2022-23.

The Reserve Bank of Australia has previously noted wage growth of 2 and 3 per cent will be the new normal as the economy continues to suffer from ‘spare capacity’.

ME money expert Matthew Read said, “When incomes don’t rise in line with expenses, households find it more difficult to save, putting their financial goals under pressure.”

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Other barriers to achieving financial goals cited by respondents include a lack of discipline (21 per cent), lack of financial knowledge (13 per cent) and a bad attitude (5 per cent).

Overall the study found a minority of respondents (25 per cent) said they were ‘very likely’ to achieve their goals, indicating a general lack of confidence in the ability of households to achieve their financial goals.

When asked to rank the importance of certain financial goals, the top five most important goals were revealed to be:

  1. Saving for a holiday, car or expense other than a home;
  2. Building up ‘rainy day’ savings;
  3. Saving enough to buy a property;
  4. Reducing expenditure on ‘expensive’ habits; and
  5. Not building up any more debt.
Will low wage growth stop Aussies from reaching their financial goals?
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About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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