“The survey findings show that we are on the right track,” ASIC’s Senior Executive Leader, Financial Capability, Laura Higgins says. “We are asking the right questions.”
Higgins, who was on the Australian steering committee for the survey, sees financial wellbeing as a ‘long game’. It is not something we ‘fix’ and she sees the survey as highlighting work required to build the financial wellbeing of particular groups such as women, small business owners, young people and sole-parent households.
“The shift from financial literacy to financial wellbeing is a continuum of research that will lead to greater understanding of the variables that make up better financial decision-making and wellbeing.”
The surveys highlighted the impact of a variable income on financial wellbeing. People in both Australia and New Zealand who had considerable variation from month-to-month in their household income recorded financial wellbeing scores of 41 in Australia and 44 in New Zealand, well below the national average in both nations of 59 out of 100.
“We have to recognise that behaviour change is really important, but that will always be moderated by income,” Kempson says.
Those whose income did vary were more likely than average to be self-employed (23 per cent in Australia and19 per cent in New Zealand).
“We need to further examine the financial wellbeing of those who are in small business or part of the gig economy,” Higgins says.
“This is a fundamental change in the employment market over the last 15 years and creates new risks for financial wellbeing.”
Consumer Action Law Centre CEO Gerard Brody says the survey reflects the financial pressures on small-business owners.
“The gig economy … is pushing the costs of business ups and downs onto individuals,” he says.
Brody suggests further research into the financial wellbeing of small business owners and gig economy workers is required.
“What makes people vulnerable is the very challenge of managing complex income and expenditure variables,” he says.
There was an over-representation of women in the group with more variable income (58 per cent females/42 per cent males in Australia; and 56 per cent females/44 per cent males in New Zealand.
“There are implications for gender inequality and urgency for efforts to reduce the vulnerability of women,” Professor Roslyn Russell from RMIT University says.
There are particular challenges around improving the financial wellbeing for people living with disability or chronic health conditions, she says.
For Dr Wood, real improvements in financial wellbeing won’t happen overnight, -or from one-off workshops.
“It is an ongoing, long-term process and, as such, planning for any intervention needs to take this into account,” she says.
From Dr Wood’s experience, “money can only buy you comfort, not your happiness and neither can it buy your wellbeing.”
“You will have to work on it,” she says.
Emily Ross is an author, journalist and editor
Gerard Brody, Laura Higgins, Robert Drake, Dr Pushpa Wood, Dr Simon Peel and Professor Roslyn Russell were invited to contribute insights as members of ANZ’s external steering committees for this research. ANZ acknowledged their contribution to the research through a donation to their nominated charity.