How can your clients keep track of their spending?

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ASIC’s 2012 spending clock estimates the average Australian household will spend $69,166 on general living costs in 2012. This amounts to $1,290 per week [1]. Yet only 54% of people know exactly what their money is spent on [2].

This information supports the release of ASIC’s new suite of tools to help Australians track where their money goes.

ASIC’s Senior Executive Leader, Financial Literacy Robert Drake says, ‘We suspect many households end up misdirecting thousands of dollars each year because they are not keeping track of where their money goes. As the spending clock  shows, expenses add up quickly.’

‘Our research shows many people fall into the habit of living pay to pay. That’s why we have developed a new suite of tools to help Australians take control of where their money goes week to week, so they can direct it to where it matters most.’

The tools are:

  • a free smartphone app called ‘TrackMySpend’  available on iTunes
  • a Managing Your Money booklet
  • an online Budget Planner on ASIC’s MoneySmart website .

The TrackMySpend app can be used to record expenses on the go. The app helps the user set a realistic spending limit and stick to it. Expenses are entered by category to ensure the user’s money goes towards the things that are important.

One user said, ‘I like the ability to view my expenses as needs or wants. I could see straight away where to look for opportunities to save’ [3].

According to The Telstra Smartphone Index [4] ‘People aged between18-44 are the highest proportion of smartphone users in Australia. More than 70% of 25-29 year olds own a smartphone, followed by 69% of 21-24 year olds and 66% of 30-40 year olds.

Mr Drake says, ‘If 85% of people with smartphones use their phone on the go,[5] then we have a chance to reach these young people while they are on the move, so no expenses can slip through the cracks. The app can also help these younger demographics stick within the budget they have set for themselves, so they can save for a holiday or get rid of debt.’

ASIC’s top tips on how to take control of your money include:

  • TRACK your day-to-day spending by recording what you spend over a week or a fortnight using the TrackMySpend app.
  • COMPARE money in and money out over the period of a month. Put your income and expenses into MoneySmart’s budget planner and let it do the calculations for you.
  • PRIORITISE where you want your money to go. Identify your needs versus wants, make savings (switch bills) and cuts (reduce the things you can live without), set savings goals and refine your budget.
  • ACT to make your money work for you. Mark upcoming big bills in your calendar. Put your savings into an account that is not accessible by ATM. Stay on track by checking your budget once a year and adjusting it if your finances change. Reward yourself with occasional treats so living on a budget doesn’t feel like a chore.

The Managing Your Money booklet is a step-by-step guide to budgeting, with a lift out budget template for those who prefer pen and paper. The booklet and other publications can be ordered for free on the MoneySmart website.

The Budget Planner on MoneySmart’s website  is the most popular tool used by 28,000 people each month.

[1] The spending clock is based on ABS Household Expenditure data
[2] Based on data from 1,400 anonymous participants who used the Money Health Check tool. Participants responded to the question, ‘Do you know what your money is spent on?’
[3] Based on ASIC user research 2012
[4] The Telstra Smartphone Index, 2011 by The Nielsen Company
[5] Research by Google and Ipsos MediaCT 2012

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