Australians still financially challenged

19-May-2017

By Megan Tran

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New research from BT Financial Group has shown that nearly a third of Australians live from pay cheque to pay cheque and 30 per cent of them are concerned about the amount they must find to extinguish debt each month.

The new statistics revealed more Australians are experiencing financial pressure despite 70 per cent believing they have strong or complete control over their finances.

Concern about debt was similar for low and high income earners indicating there was little correlation between level of earnings and attitudes towards debt, according to BT head of financial literacy and advocacy Bryan Ashenden.

“No one is immune. We all have worries about our money from time to time, but what can make a difference is to put steps in place, so that we worry less,” he said.

The study contradicted conventional wisdom about millennials, showing they were not frivolous with their savings and did take their financial matters seriously.

To this end the paper showed millennials were financially well prepared with nearly half (49 per cent) saying they always or often create strategies to reach their financial aspirations, compared with 39 per cent of generation X.

However 18 per cent of millennials admitted they always or often spent more money than needed compared with 10 per cent of gen X.

One example is primary school teacher Michelle Taylor, 28, who along with her husband, Heath, made it a priority to plan for their financial future.

Through their disciplined approach they could pay for their wedding in full and their honeymoon in Europe.

“I’ve always been a very organised person and my husband is sensible with his cash too. We have good jobs but the main thing is we’ve always had a budget to make sure we only spend what we can afford,” Taylor said.

“There is a misconception that millennials are frivolous and will never be able to get on the property ladder. I believe this is a big generalisation that doesn't hold true for all young people. I have secured a property purchase twice now, once on my own and now with Heath. People who say budgeting is limiting and makes life dull might be surprised to realise the benefits of making a plan, sticking to it and reaping the reward for that effort,” she added.

Taylor pointed out that though her generation took financial matters seriously they could also be a source of stress for many.

She said her parents’ example of saving money had impacted her own lifestyle and if the couple were to have children it would be something she would instil in them.

“I’m a firm believer in the value I have towards money which I’ve inherited from my parents by making smart decisions and knowing that money doesn't miraculously appear from an unknown source.”

Taylor doesn’t feel these saving habits have negatively affected her, instead saying she can “enjoy the fruits of my labour and have something to look forward to by saving for things [I] really want”.

Ashenden said people can manage their finances first by having conversations about monetary matters with their family and, from there, mapping what their finances look like and put steps in place to properly manage their money.

According to BT Financial Group other ways to manage money include consolidating loans to get a better interest rate to overcome debt, saving into superannuation and seeking financial advice to design a plan based on your lifestyle.

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