Australian women feel less on top of their money than men, despite being more likely to manage household finances.
A survey of Australian adults, conducted by ANZ, measured financial wellbeing based on a model by Professor Elaine Kempson of the UK.
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”, she says.
Australians scored an average of 59 out of 100, with women scoring an average of 57 compared with 61 for men.
Just 41% of women feel on top of their money, compared with 49% of men.
Of 3578 adults surveyed, 24% had no real financial worries, 40% were doing ok, 23% were getting by, and 13% were struggling.
The key to financial wellbeing?
Actively saving and not borrowing for everyday expenses.
Those two actions contributed 19% and 16% respectively to the fiscal health score.
— The Today Show (@TheTodayShow) April 18, 2018
“Not everyone is in a position to save or to avoid borrowing for everyday expenses. However for many people, being in a position to start saving can lead to an improvement in their financial wellbeing,” the report says.
“This is an important finding suggesting there has previously been too much importance attached to ‘financial knowledge’ and ‘financial literacy’ in improving financial wellbeing.”
The report found that financial knowledge is less influential than psychological factors.
Self-belief and the confidence to make money decisions and manage day-to-day finances were critical, the report says.
The survey findings were consistent with similar research recently conducted in New Zealand and Norway.
While household income is an important factor in determining financial wellbeing, accounting for a 7% variation in score, the survey showed that people could have relatively high levels of financial wellbeing without having a particularly high income.
The survey also found:
– Having less than $1000 in savings and investments was strongly associated with low levels of financial wellbeing.
– Mortgage-free homeowners had an average financial wellbeing score of 74 out of 100, compared with 58 for mortgaged homeowners, and 50 for renters.
– One in four Australians have more than six months of income saved.
– One in four women have no savings.
– The average financial wellbeing score for millennials was 55 out of 100, compared with 45 for single parents, and 71 for seniors.
-Seniors are the most cautious Aussies, with two in three making sure they have money put aside for tough times.