Deakin Business School experts talk financial trends and tips for 2018

Deakin Business School Financial Planning lecturer Dr Campbell Heggen said people are often tempted to set unrealistic financial goals for themselves, when they could start with goals that can be reached within a matter of weeks or months.

"Unfortunately, our brains are hardwired to place a greater weight on the present over the future when making decisions," Dr Heggen said.

"This means we find it easier to prioritise smaller, more immediate rewards over larger, slower ones like long-term savings."

He said focusing on incremental behavioural changes and forming good financial habits could lead to better financial outcomes.

"While having big, audacious goals is fine, breaking them up into smaller and more realistic targets makes them easier to achieve," he said.

Dr Heggen said another worthwhile tactic for those looking to boost their bank balance in 2018 was sharing their financial goals and budget plans with family and friends.

"Just like having a workout partner can help you achieve your personal fitness goals, talking through your financial goals with friends and family can help keep you motivated and accountable to stay on track," he said.

"It also helps to let others around you know why you'll be skipping out on some of those expensive social engagements."

He said one easy way to keep track of your finances was to withdraw a set amount of cash each week to cover day-to-day expenses.

"The tap-and-go economy is designed to make it easier to separate you from your money – buy now, pay (and think) later," he said.

"Research suggests that people who pay by credit card instead of cash increased the amount of money they're willing to spend, so if you set yourself a cash allowance that can become your self-imposed pre-commitment to spending.

"The pain of paying is far stronger with cash than with credit cards, because cash feels more 'real' than the idea of paying with a card, and the pain is immediate versus delayed, so we care about it far more."

And the ease of spending associated with hi-tech tools is only set to get worse, according to Deakin Business School Associate Professor Victor Fang.

Associate Professor Fang said 2018 will likely see the continuing rise of "fintech" – financial technology revolutionising activities such as money transfers, loans and payments via smartphone.

"The general public – particularly younger customers and investors – are so tech savvy now, and the technology is mainstream enough that we're closer than ever to the point where your wallet could be entirely replaced by your smartphone," he said.

While investor confidence has rebounded from the lows of the Global Financial Crisis, Associate Professor Fang said markets were still quite fragile.

"One thing I would suggest to smaller mum and dad investors is not to panic and over-react and buy or sell immediately," he said.

"Global stock market fluctuations have become the new norm, so use your own judgement and know when to stick it out – as long as uncertainty and fear rule, the rollercoaster ride will continue for Australian investors."