Mortgage Choice and CoreData’s Financial Fitness Whitepaper has revealed that 35 per cent of Australians feel ashamed of their financial situation, while nearly as much, or 34 per cent, are embarrassed by their financial habits.
Mortgage Choice CEO Susan Mitchell said: “These habits may be contributing to the shame and embarrassment some Australians say they feel about their finances. Indeed, the whitepaper reveals that almost a fifth (19 per cent) of Australians say they are living secret financial lives.”
In addition, 42 per cent of respondents feel mortified by their personal debt, with one in three withholding the fact that they are even in debt.
The research found that one-fifth of respondents pay the minimum amount on their credit card each month, while 11 per cent said they have not paid off their credit debt in full over the last three months or longer.
Ms Mitchell said these findings on credit card habits are “worrying”.
“The fact that people are not paying off the balance on their credit card each month is worrying. However, what is also particularly concerning is the number of Australians who pay only the minimum amount of their balance each month,” she said.
“This prolongs the amount of time they are in debt, as a considerable proportion of the payment is servicing the interest, rather than the balance and is one way consumers feel trapped in a seemingly endless cycle of debt.”
The study also found that 27 per cent of Australians polled spend more than money than they earn, which Ms Mitchell said could explain why “they are racking up personal debt”.
The Mortgage Choice CEO speculates that the feelings of embarrassment could be holding Australians back from taking an active role in managing their finances.
“The research suggests this might be the case, as one-fifth of Australians said they often do not regularly monitor their finances. The problem with avoiding the topic of money altogether is that often, a small problem can snowball into something more serious if it is not dealt with early on,” Ms Mitchell said.
Earlier this year, Mortgage Choice and CoreData’s Financial Fitness Whitepaper revealed that nearly 85 per cent of respondents felt their wellbeing was being impaired by financial tensions.
The February whitepaper also found that more than a quarter, or 26 per cent, of respondents had not set any financial goals, while only 20 per cent of those who did had not documented them clearly.
The earlier research had also found that an “alarming” 18 per cent of respondents neglected to do so at each pay cycle.