Employing simple tactics to budget, save, reduce debt and prepare for retirement could be all it takes to set you apart as a money expert.

This is because one in two Australians have low or very low levels of financial literacy, according to a new report funded by the National Australia Bank.

In order to calculate the nation’s financial resilience, two Australian academics tested our knowledge and behaviour, the services and products we use, the economic resources we own, and our social capital (such as friendships).

One of the authors, UNSW Centre for Social Research’s Dr Rebecca Reeve, said knowledge and behaviours “stood out” as the financial area where Australians are “most vulnerable”.

“We felt there was a need to move beyond merely measuring access to products and services to really look at what the different things are that makes someone resilient,” Dr Reeve told The New Daily.

The Financial Resilience in Australia report tested four areas, and found knowledge and behaviour to be our biggest vulnerability.

“Financial knowledge and behaviour stood out as the area where the adult population of Australia was the most vulnerable compared to the other areas that we measured.”

Overall, the study estimated that 42 per cent of us have ‘low’, and 8 per cent ‘very low’, levels of financial knowledge and behaviour, based on the responses of 1496 Australians to an online survey conducted in September 2015.

Dr Reeve said it is important to improve financial literacy, but also warned that we shouldn’t look at this issue “in isolation” because ignorance and poor behaviours go hand-in-hand with other disadvantages. For example, some of the groups with the lowest financial literacy were the young; the unemployed and underemployed; those of non-English speaking backgrounds; and those in lower income brackets.

Based on this report, you could be financially savvier than much of the nation if you save regularly, pay down your debt quickly, follow a budget, and make voluntary super contributions.

Save regularly

Spending less than you earn is key to growing wealth. Photo: Getty

According to the report, only about half (56.4 per cent) of Australians save regularly. One in two said they had limited to no savings, and one in 10 had no savings at all.

For those who can afford it, spending less than earnings is crucial. Putting aside a portion of your pay cheque in a safe place makes you more resilient to financial shocks (like a car breakdown or a rise in interest rates).

And through the magic of compound interest, your savings can not only be protected from the ravages of inflation, but it can grow many times greater than the amount you started with.

Click here to learn more about the magic of compound interest

Boost your super

Contribute extra from a young age to retire comfortably. Photo: Getty

Only 21.1 per cent of Australians make extra contributions to their superannuation, according to the report.

Currently, employers put 9.5 per cent of your wage into the super fund of your choice. But many experts believe that, if you were to rely on your boss’ contributions alone, you would not retire comfortably.

Thankfully, the government allows us to ‘sacrifice’ extra chunks of our pre-tax pay into super. Not only does this boost the amount of money you retire with, but it can drop your taxable income into a lower bracket, so you pay less tax.

Click here to learn more about voluntary contributions

Stick to a budget

Budgeting is crucial to saving. Photo: Getty

Another concerning statistic from the report: less than one in two Australians (49.1 per cent) follow a budget.

Planning out your spending can be a very useful way to constrain it so you actually save some of your wage. It also ensures you have enough money to cover important expenses like your rent or mortgage.

By examining your spending to create a budget, you might also discover some hidden or unnecessary spending that can be reduced – such as a gym membership you rarely use or an online subscription you forgot.

Get some handy budgeting tips here

Pay down debt

Paying only the minimum on your credit is a fast way to lose money. Photo: Getty

The report also looked at two kinds of debt management: personal loans and mortgages. It found that 56.8 per cent paid more than the minimum payment required by a credit card company or other personal loan provider.

Minimum credit card payments are an important issue. By law, banks have to tell you the minimum amount you must pay each month in order to eventually pay off your debt. But ‘eventually’ can be a very long time – and incur you many hundreds of dollars in interest. Thus, it is always a wise idea to consider paying above this amount if you can afford it.

The report also found that only one in four (28.5 per cent) made extra repayments on their home loan. Extra repayments can reduce the principal of your loan far quicker, potentially saving you thousands in interest. But some home loans charge extra fees. And the money you save in interest may not exceed the yield you could have received in a super fund or other investment. So best consult an expert.

* The New Daily is owned by industry super funds