More than 70 per cent of Australians expect their finances to improve or remain stable over the coming year, new research has revealed.
According to the latest ING DIRECT Financial Wellbeing Index, 65 per cent of households maintained or improved their financial position in 2011 by increasing their household savings and spending less on unnecessary purchases.
But while the majority managed to improve their financial position last year and are confident of achieving the same thing in 2012, 32 per cent of households said their financial wellbeing deteriorated last year.
The overwhelming hurdle reported by 71 per cent of respondents was increased food, power and transport costs.
ING DIRECT chief executive officer Don Koch said Australians recognised that while they cannot control the direction of the economy they can take positive action to strengthen their own finances.
"By building a buffer of savings, focusing on essential purchases and tightening household budgets, many Australians have shored up their financial position. It's not a case of hunkering down, it's just sensible money management" Mr Koch said.