More than half of all Australians feel some form of financial stress.
More than half of all Australians feel some form of financial stress, with more than 85 per cent saying it adversely affects their health and wellbeing.
The Financial Fitness whitepaper conducted by Mortgage Choice and CoreData analysed Australians’ financial attitudes and behaviours.
The whitepaper revealed that financial stress affects the wellbeing of Australians to varying degrees, with 90 per cent of female respondents being affected compared to 77 per cent of males.
The research also revealed that more than two in five respondents are embarrassed by their debt.
“A number of factors may be contributing to people’s level of financial stress resulting from the shame associated with debt, poor planning and a general lack of understanding of their financial situation,” said Mortgage Choice chief Susan Mitchell.
Respondents from Queensland, New South Wales and Victoria are the most concerned, with as many as 85 per cent in Queensland, 84 per cent in New South Wales and 81 per cent in Victoria claiming financial stress negatively affects their wellbeing.
Analysis revealed that not having a clearly defined financial strategy could be a major cause of stress. Over 26 per cent of respondents said they do not set financial goals and, of those who do, only 20 per cent monitor them.
“It is no secret that a sound financial plan with defined objectives give people looking to get financially fit a clear purpose and subsequently, peace of mind,” said Ms Mitchell.
“Setting clear financial goals is one of the key foundations of financial wellbeing. I would urge anyone who is looking to gain control of their finances to first reduce their level of personal debt, namely any high-interest non-tax deductible debt such as personal loans and credit card debt.”
The research also found that almost two in 10 respondents do not save.
“Setting aside an emergency or rainy-day fund will teach you to save and will give you financial security in the short-term if you suffered personal tragedy or loss. I urge people to not underestimate the value of planning for the unexpected such as the breakdown of a marriage, illness or death,” said Ms Mitchell.
“Getting financially fit is no simple task and as the research findings reveal, many people feel overwhelmed and do not know how to help themselves, which is why it is important to engage a qualified financial adviser. An adviser can help give you the peace of mind that you are on track to achieve the goals that are important to you.”
Mortgage Choice Financial Planning advisers recommend the following tips to feel good about your finances:
- Write down your short term and long-term financial goals in a notebook.
- Print out your bank and credit card statements and identify what spending you can reduce or cut out so it can be saved or invested to reach your goals.
- Create a defined budget and stick to it.
- Save some of your salary in a separate savings account each pay cycle.
- Track the progress you have made on your short- and long-term goals regularly. For example, consider a fortnight, six months and New Year review and remember to celebrate reaching your goals!
After the banking royal commission, could you trust any financial advisers? Do you follow these tips? What are your suggestions for maintaining, regaining, or creating financial fitness?