What’s your biggest financial regret in life?
Not buying that fancy red car in your youth? Passing on an investment property because a housing crash was just around the corner? Pro tip: it’s never coming.
Well, apparently the biggest financial regret for Australians is not prioritising their financial ‘health’ sooner.
According to research analyst service McCrindle, many Australians are living from week to week. More than half – 53 per cent – have less than $5000 in savings, and 22 per cent have only $100 in savings. Breaking that 22 per cent down, women are more likely to have only $100 or less in their savings account – 26 per cent – than men at 17 per cent.
As a result, just one quarter of Australians over the age of 18 feel extremely or very financially prepared for retirement.
Retirement planning starts early
The claims reflect the results of a pre-COVID study from Melbourne University, which found most Australians (77 per cent) have regrets with regard to their finances. The top three of these regrets are related to behaviours that would help them out in retirement – not saving, investing or budgeting – while the fourth most common regret was not learning more about finances and money.
Men are more likely to feel financially prepared for retirement, being almost twice as likely as women to feel extremely or very financially prepared 30 per cent compared to 18 per cent.
Men also have a higher engagement with their super, being more likely to check the balance of their superannuation at least monthly – 45 per cent, compared to 29 per cent for women.
“For the future financial health of Australians, it is important for leaders and Australians to continue to take steps to reduce this gender gap,” says McCrindle principal Mark McCrindle.
Australia’s oldest residents, builders (those born before 1946) and baby boomers are the most likely to feel extremely or very financially prepared. Generation X, however, is the least likely to feel financially prepared. This is notable as the oldest of gen X will be approaching retirement age by 2031.
Young, but engaged
The younger cohorts may not be financially prepared but they are engaged.
McCrindle reports more than half of gen Z – 54 per cent – and two in five gen Y – 42 per cent – check their super balance at least monthly.
“This poses an important question for organisations; with a younger generation of Australians highly engaged with their superannuation and looking to prioritise their financial health earlier in life, how can organisations equip them to succeed?” Mr McCrindle says.
The Melbourne University study found that the biggest barrier to improving finances was our distrust of financial institutions and advisers.
As a result, the university recommended the financial service sector should ‘reorientate’ itself to focus on financial wellbeing.
“Australians deserve a financial services sector that they can trust to work with to improve their financial wellbeing,” the report stated.
“For a happier, healthier and more prosperous Australia, coordinated actions on behalf of industry, government, academia and the Australian public are required to make this change.”
Do you have any financial regrets? Did you try to fix them? Why not share your experience in the comments section below?
Also read: How to plan for retirement when ill health strikes
My main regret is saving money and not spending it like others going on holidays, eating out, buying stuff I did not need etc. Now I am not entitled to pension or the benefits associated with it.
I totally sympathise.
Have you read Noel Whittaker’s Retirement Made Simple? It may hold the answer to your situation.
I too am a major Noel Whittaker fan. I saved, because I was raised in a poor home & saving was just what you did. I really empathise with people worried about getting good financial advice. Every website advises you to do it but there are endless stories about being mislead. I found one and I think she is a legend and unique. I don’t know her personally. I just searched & searched until I was sure. She is Jacie Taylor & she built a company called Periapt Something. Don’t know the rest of it but Google & you’ll find her. She operates out of Adelaide & so you just zoom her. She is phenomenal and the only ‘not for profit’ advisor in the country. Her advice will save me tens of thousands. But the biggest thing she gave me was confidence. I now know that I have it right. Telling others about her is my way of ‘paying it forward’.