Research: More than half of Australians feel financially stressed

February 26, 2019

Mortgage Choice and CoreData’s Financial Fitness whitepaper, has revealed that more than 50% of Australians feel financially stressed, with almost 85% saying it impacts their wellbeing negatively.

The Whitepaper, which explores Australians’ attitudes and behaviours towards their finances also discovered that more than two in five respondents admit they are embarrassed by their debt.

Mortgage Choice Chief Executive Officer Susan Mitchell said, “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.”

The research revealed that financial stress is negatively impacting the wellbeing of Australians to varying degrees.

Of those who said they were feeling financially stressed, it was revealed that female respondents said financial stress was impacting their overall wellbeing negatively to a larger extent than males, 90% versus 77%.

Across the country, respondents in Queensland, New South Wales and Victoria were the most financially stressed, with as many as 85% in Queensland, 84% in New South Wales and 81% of respondents in Victoria saying they felt financial stress was negatively impacting their well being.

The Whitepaper also revealed that many respondents do not have a clearly defined financial strategy, which could be a contributing factor to their stress. For example, over 26% of respondents do not set financial goals and, of those that do set financial goals, only 20% clearly document 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.

“At Mortgage Choice, we believe that setting clear financial goals is one of the key foundations of financial well being, in order to be able to afford to live the life they want.

“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 loan and credit card debt.

“The research found that an alarming number of respondents were not saving a portion of their salary, with over 18% of respondents saving nothing each pay cycle.

“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.

“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.

“A Mortgage Choice financial adviser can help you get financially fit and create a strategic plan for the life you want to live.

“There is a common misconception that financial advice is for the wealthy or a means by which to ‘get rich’ but it is much more straightforward.

“A qualified adviser can help you create a strategic financial plan for what you need, whether that be getting out of debt, saving for your first home deposit, or new car, investing, starting a family, protecting your most valuable assets such as your income and your home or, preparing for retirement.

“An adviser can help give you the peace of mind that you are on track to achieve the goals that are important to you,” concluded Ms Mitchell.

Tips

Get financially fit with these top tips from Mortgage Choice Financial Planning advisers:

• 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!