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Australians becoming more anxious about their finances
Financial wellbeing among Australians is suffering amidst mounting concerns over retirement plans, mortgages and personal debts, the latest NAB research shows.
Anxiety around financial issues has surged, with NAB’s Financial Anxiety Index rising by 1 point to 58.8 points in the three months to December 2019.
The index is “based on the level of concern over future spending and savings plans arising from their current financial position”, according to NAB.
Financial anxiety was the highest among the 30-49 age bracket, going up by 2.1 points to 64.1, but was the lowest in the 65+ age bracket, where it dropped by 2.1 points to 47.
Both men and women became more anxious about money issues, but the gap in financial anxiety between the genders widened in the last quarter of 2019.
This was driven by women’s level of concern growing more sharply than that of men. Women’s financial anxiety jumped by 1.4 points to 61 points in the previous quarter, compared with men which grey by half a point to 56.4.
Having enough retirement funds was the biggest concern Australians had around their finances, as an increasing number of people become worried that they can’t afford to retire.
Other major drivers of financial anxiety were the ability to provide for their family’s future, paying for medical bills and healthcare, as well as not having enough money for non-essentials such as holidays or eating out.
Many people were also worried that they wouldn’t be able to come up with $2,000 in case of an emergency, which indicates that many people don’t have a rainy-day fund.
Growing number of Aussies in financial hardship
Not having enough money for an emergency was also the top reason behind financial stress or hardship. The number of people with this issue went up by 3 percentage points to 23 per cent in the last quarter of 2019.
This aligns with findings from a separate ING study, which showed that more than a quarter of Australians find it difficult to save money and are living from pay cheque to pay cheque.
The second biggest cause of hardship was being unable to pay a bill, a problem which 19 per cent of Australians battle with. That number was 17 per cent in the previous quarter.
Financial stress or hardship affected about 40 per cent of people in Australia in the three months to December 2019. This surged from 36 per cent in the previous quarter and is the highest number reported in three years.
Looking closer at the gender breakdown, the number of women in hardship climbed to 42 per cent from 35 per cent in the previous quarter. For men, the proportion was “broadly unchanged”, moving up by 1 percentage point to 38 per cent.
By age, financial stress or hardship affected 57 per cent of those aged 18 to 29 years old – marking an equal survey high. The number impacted in all other age groups saw little changes.
Tips to grow your savings
- Set yourself a goal – Whether it be a long overdue overseas holiday or a lavish wedding, having something nice to work towards to will help keep you motivated. Get started by working out your target amount, how much you need to put away every month and how long you’ll need to stick to this plan to reach your target.
- Watch your discretionary expenses – This is what you spend on non-essentials, such as eating out at restaurants, concert tickets and Uber rides. While it’s fine to indulge a little, there’s no need to go all out all the time.
- Consider a savings account – Chances are you might already have one of these but perhaps you’re not giving it much attention. If this is the case, or if you don’t have a savings account, consider using RateCity’s Savings Account Calculator to compare what’s available on the market.
Disclaimer
This article is over two years old, last updated on February 26, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent savings accounts articles.
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