19 Apr 2018
Financial wellbeing 2018: full coverage
bluenotes contributors |
We bring you all the views and insights from ANZ’s financial wellbeing survey.
19 Apr 2018
More than a third of Australians just getting by financially – or worse
More than a third of Australians and New Zealanders are considered just ‘getting by’ financially – or worse, according to a new ANZ study.
The report, Financial Wellbeing: a survey of adults in Australia/New Zealand, found 23 per cent of Australians were classed as below average in their financial behaviour score, grouped as ‘Getting By’ (see table below).
"Detailed knowledge and experience of financial products or services has only limited direct influence on financial wellbeing.”
Thirteen per cent described their current financial situation as ‘bad’ and were classed as ‘Struggling’.
The figures were very similar in New Zealand, which came in at 24 per cent ‘Getting By’ and 13 per cent ‘Struggling’.
Overall the report found just under half of Australians felt on top of their money, with just one in four possessing more than six months in income.
The report is the sixth and latest study from ANZ which provides unique insight into specific behaviours and mindsets which affect and are affected by financial wellbeing. Below are four key takeaways.
You can read ANZ’s full coverage on its Financial Wellbeing report HERE.
INSIGHT 1: WELLBEING
ANZ’s survey measured the financial wellbeing of 5,099 adults in Australia and New Zealand. Fifty-nine out of 100 is the average financial wellbeing score for adults in both nations.
The 2018 survey marks an important shift in ANZ’s independent surveying of financial literacy and capabilities in Australia and New Zealand towards considering a broader definition of ‘financial wellbeing’.
INSIGHT 2: INFLUENCE
The survey found detailed knowledge and experience of financial products or services has only limited direct influence on financial wellbeing.
The research shows regardless of people’s knowledge, other factors such as psychological influences, social and economic circumstances and the ability to actually take action (that is behaviour) are more important influences on financial wellbeing.
Financial wellbeing is “the extent to which someone is able to meet all their current commitments and needs comfortably and has the financial resilience to maintain this in the future.”
- Elaine Kempson, Professor Emeritus of Personal Finance and Social Policy Research at the University of Bristol and Associate Professor at Oslo Metropolitan University.
INSIGHT 3: COMFORT
The 2018 survey calculated scores for three components of ‘overall financial wellbeing’, including:
- An ability to meet financial commitments such as bills and loan payments (meeting commitments);
- The extent to which they felt comfortable with their current and future financial situation and to which their finances enabled them to enjoy life (feeling comfortable); and
- An ability to cope with a significant unexpected expense or fall in income (resilience for the future).
INSIGHT 4: CATEGORIES
The survey identified four categories of relative financial wellbeing in Australia and New Zealand.
Other key findings:
The report found two specific behaviours – active saving and not borrowing for everyday expenses – are vital components of financial wellbeing.
The study showed the two behaviours contribute 19 per cent and 16 per cent respectively in Australia (and 18 per cent and 17 per cent respectively in New Zealand) to the differences in people’s overall level of financial wellbeing.
The report also found:
- Having less than $A1,000 in savings and investments is strongly associated with low levels of financial wellbeing;
- Psychological factors have an influence on financial wellbeing, particularly people’s confidence in their money management skills and belief in the power to control their own lives and exert some control over their finances;
- People who own their own homes (mortgage-free) have greater financial wellbeing;
- People who have considerable variation from month-to-month in their household income recorded financial wellbeing scores 17 points below the national average of 59; and
- Psychological factors have an influence on financial wellbeing, particularly people’s confidence in their money management skills and belief in the power to control their own lives and exert some control over their finances.
Emily Ross is an author, journalist and editor
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.