A new survey has revealed that a vast majority of Australians believe they are well equipped to make adequate financial decisions.
Major brokerage Mortgage Choice launched this week its Australian Financial Services White Paper, which revealed that 77.2 per cent of Australians consider themselves to be “money smart”.
“Increasingly, when we break the data down into age groups, it is clear that those over the age of 60 and under the age of 30 boast the highest proportion of ‘financial-savvy’ individuals,” Mortgage Choice chief executive officer John Flavell said.
Over 85 per cent of surveyed respondents over the age of 60, and fewer than 80 per cent of those 30 and under, labelled themselves “financially savvy”.
Australians under the age of 30 who believe they’re “financially savvy” also consider their financial know-how to be “far superior” to their peers.
Comparatively, of those aged 30 and over, 55 per cent consider their financial knowledge superior to that of their peers, while just 35 per cent over 60 hold the same view.
“[It] would appear that most Australians would define ‘financial savviness’ in the same way,” Mr Flavell said. “According to the surveyed respondents, to be ‘money smart’, you need to be ‘street smart’ and have the same ability to make good decisions with the money that you have.”
Of those who believe they are “money smart”, over 60 per cent review their bank accounts at least once a week.
Moreover, 90 per cent of “money smart” respondents noted the importance of a proactive financial approach, applied through the use of a draft budget.
A further 68 per cent of “financially savvy” Australians save more than 10 per cent of their income for a “rainy day” fund, while an additional 68 per cent of Australians said that they actively research their financial options online before making a decision.
The survey also revealed that 17 per cent of “money smart” respondents pay their credit card debt in full on a monthly basis, and ensure that they don’t accumulate more debt than they can manage.
Conversely, one in three surveyed respondents struggle to make adequate financial decisions because they feel overwhelmed by the variety of choices available to them.
“We regularly put the concept of ‘choice’ on a pedestal. It is agreed that an industry with an abundance of choice is strong,” Mr Flavell said.
The survey data also revealed that 73 per cent of respondents believe they benefit from financial advice, while 93 per cent cited the importance of increasing their industry knowledge.
The Mortgage Choice CEO concluded: “Financially savvy Australians are twice as likely to live a comfortable retirement and 1.5 times more likely to have an emergency fund saved for those ‘rainy day’ expenses.
“In a nutshell, financially savvy Australians are more likely to cope with life’s various hurdles as and when they retire. And in today’s market, that is very important.”