A recent report has revealed that more than 50 per cent of Australians are stressed about their finances, with nearly 85 per cent saying it impacts their wellbeing.
The Financial Fitness Whitepaper, a report commissioned by Mortgage Choice and undertaken by CoreData, explored behaviours and attitudes around finance.
The paper revealed that Australians are being negatively impacted by financial stress to varying degrees, with 40 per cent of respondents feeling embarrassed by their debt and almost 85 per cent of respondents stating that they believed their wellbeing was being impaired by financial tensions.
Australians are being negatively impacted by financial stress to varying degrees, the report found. For example, 90 per cent of female respondents said they felt that financial stress impacts their overall wellbeing, while only 77 per cent of males said that it did.
There was also state-by-state variance, with the eastern-most states (Queensland, NSW and Victoria) struggling most from financial stress; 85 per cent of respondents in Queensland felt their wellbeing was being affected by financial anxieties, followed by 84 per cent in NSW and 81 per cent in Victoria.
However, the whitepaper also found that 26 per cent of respondents had not set any financial goals, while only 20 per cent of those who did have not documented them clearly.
Further, in terms of putting savings aside, the research found that an “alarming” 18 per cent of respondents neglected to do so at each pay cycle.
Susan Mitchell, chief executive officer of mortgage brokerage Mortgage Choice, commented: “Setting aside an emergency or rainy day fund will teach you to save and will give you financial security in the short-term if you suffered personal tragedy or loss.”
The CEO of the brokering and financial planning company urged Australians to recognise the importance of saving money for the unexpected, including family disruptions, long-term illness or the death of a loved one.
Noting that many respondents did not have clearly defined strategies in place to improve their financial situations, Ms Mitchell added: “It is no secret that a sound financial plan with defined objectives give people looking to get financially fit a clear purpose and subsequently, peace of mind.”
The brokerage CEO acknowledged that some contributing factors to financial stress could include “shame associated with debt, poor planning and a general lack of understanding of their financial situation”.
Ms Mitchell stated that Mortgage Choice believed that setting clear financial goals was “one of the key foundations of financial wellbeing” in order for people to be able to “afford to live the life they want”.
In addition, the CEO advised that reducing high-interest, non-tax deductible debt (including credit card debt and personal loans) should be the first step towards gaining financial control.
“Getting financially fit is no simple task and as the research findings reveal, many people feel overwhelmed and do not know how to help themselves, which is why it is important to engage a qualified financial adviser,” Ms Mitchell said.
“There is a common misconception that financial advice is for the wealthy or a means by which to ‘get rich’, but it is much more straightforward.
“A qualified adviser can help you create a strategic financial plan for what you need, whether that be getting out of debt, saving for your first home deposit or new car, investing, starting a family, protecting your most valuable assets such as your income and your home, or preparing for retirement,” she said.
Receiving financial advice can also provide peace of mind to customers as they take necessary steps to secure their future, she concluded.