Lesson 2.3

Boost your ‘Financial IQ’: Aussies’ most common financial goals revealed…

There are many different pathways we can travel on our journey towards building our financial fitness and a brighter financial future. There’s a reason, after all, that ‘personal finance’ is called ‘personal’. 

So when we are choosing a suitable money goal to pursue, it’s always best if your goal takes into account your own personal preferences and life circumstances. However, particularly when we are starting out on our financial fitness journey, it can be helpful to boost our ‘Financial IQ’ by familiarising ourselves with some of the most common financial goals people choose to pursue. 

What’s your financial goal? 

A recent CommBank survey found 94% of Aussies have at least one identified financial goal. 

• Saving up for travel tops our list of money aspirations, with 44% of us saving for an overseas or domestic holiday
• Boosting retirement savings and building an emergency fund tie in second place, with 32% of us identifying this as a current goal
• Paying off a mortgage came next (29%), followed by ‘just getting by’ (26%), paying off other debt (17%) and saving a deposit for a home (15%) (some people nominated multiple goals)

Of course, our money goals are heavily influenced by what stage of life we are in.

For example, the research found younger Australians aged 18 to 29 are far more likely to prioritise travel, paying off debts and saving for a home. 

Older Australians are more concerned with paying off mortgages and building retirement savings. 

The ultimate money goal 

Still, it’s not uncommon for many of us to feel unsure about which financial goal to pursue at any point in time. Seeking the support of a trained financial counsellor or advisor can be beneficial.  It also helps to take a step back and think ‘big picture’ about what it is you are trying to achieve, overall, with your finances. 

When it comes to personal finance, economists have long argued the ultimate money goal we all share is to achieve something called ‘consumption smoothing’.  In essence, you want to be able to smooth your ability to consume goods and services over your entire lifetime, particularly when you are older and unable or unwilling to work. 

When we are younger, the theory goes, it can be entirely normal to use debt to fund consumption, education or asset accumulation. The closer we are to retirement, the more we want to be debt-free and ensure we have enough assets to fund retirement. 

Ultimately, the aim is to use our working lives to accumulate enough resources to fund not only our present, but also future, consumption needs and wants.

Where to next?