Australians still living pay cheque to pay cheque

Nearly a third of Australians (32 per cent - up from 29 per cent in 2015) say they always or often live pay cheque to pay cheque and 30 per cent are concerned about the amount they have to pay off for debts each month according to research from BT Financial Group.

While nearly 70 per cent of us think we have complete or good control over our finances new research details that more Australians are feeling the pinch.

BT’s Head of Financial Literacy and Advocacy, Bryan Ashenden said income levels have no significant bearing across attitudes to debt with similar levels of concern across low and high incomes.

“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,” said Mr Ashenden.

The research also shows Millennials take their financial matters seriously, despite conventional wisdom suggesting that the younger generation are frittering away their money.

Millennials are the most financially prepared cohort with nearly half (49 per cent) stating they always or often create plans to reach their financial goals, in contrast to 39 per cent of Generation X respondents.

However despite the financial preparedness of Millennials, they still have money habits they need to curb with 18 per cent reporting they always or often spend more money than they have, compared with just 10 per cent of Gen Xers.

Commenting on how we can take the reins of our finances, Mr Ashenden said: “The first step is to encourage open conversations about money matters with our loved ones. From there we can start to build a picture of what our finances look like and put steps in place to better manage our money.”

BT’s tips to help relieve stress and manage your money include:

• Crunch the numbers. Dull but necessary. The best way to stay on top of your finances is when you know what is coming in and going out each month. There are plenty of online calculators that can help. 
• Get a handle on debt. Knowing exactly what you owe and how much it is costing you is the first step. Can you consolidate loans to get a better interest rate?
• Create a savings plan. Even if you can only save a small amount, accumulating savings for unexpected expenses can create peace of mind.
• Consider your super. Saving into super is how you can afford to live in retirement. For Millennials as little as $1 invested in super today can mean $10 in retirement.
• Seek professional advice. Financial advisers help you identify your financial and lifestyle goals, design a plan, help you stick to the plan, and make changes to the plan if your circumstances or goals change.

About the BT Australian Financial Health Index 
The BT Australian Financial Health Index is in its fifth year and covers Australians’ attitudes and behaviour across a broad spectrum of financial needs. The Index provides insights from a comprehensive analysis of the financial wellbeing of Australians – their financial situation, managing finances, saving and spending, retirement and super, insurance and investments. The Index is compiled from surveying over 4,000 (18+) Australians. The data is weighted to ensure representation of the Australian population in accordance with census data provided by the Australian Bureau of Statistics.

The 2016 BT Australian Financial Health Index canvassed the responses from 4486 Australians in November 2016.

Information is current as at 18/06/2017.