Business

New research reveals Aussies out of control with personal finances

By John Hollyman07 Jul 2015

With the new financial year on the horizon, research released today1 reveals an alarming number of Australians feel their finances are unmanageable. 80 percent of people admit to being worried about their future financial security or feel that they don’t have control of their finances, painting a worrying picture for the future.

The study reveals the majority of Australians feel stressed about money, with 73 percent of the country claiming they are anxious about their current financial situation. Nearly half of the population (43 percent) also admit they find it uncomfortable to even talk about money.

Over 1,000 people took part in the nationwide study conducted by financial planning consultancy, Eqeus, which was designed to find out about the personal finance habits of Australians.

John Hollyman, Managing Director of Eqeus, comments: “It’s a big concern that the vast majority of people feel so out of control with their finances – this has serious implications for the future of individuals and families, not to mention the larger scale effect on the economy – particularly when it comes to how financially prepared people will be for retirement.

“We are seeing increasing numbers of people of all ages who simply don’t know where to start with financial planning or who to turn to for advice which is fuelling the stress levels,” he said.

Less than one in four people (23 percent) regularly set financial goals or track their progress suggesting a sense of complacency and apathy amongst a large portion of the country.

The study shows that the main barrier to setting goals and planning for the future is the feeling that there’s little point, as any money coming into the household is already absorbed by bills and other living expenses, and it’s therefore impossible for them to think ahead. This applies to both low and high income households.

The apathy factor is equally concerning, with one in four people (24 percent) admitting they haven’t set goals because they ‘haven’t got round to it’.

Hollyman comments: “The research suggests a sense of hopelessness; many people feel there is no point in trying to improve their financial situation with no money left to play with after the daily outgoings. Others simply don’t see setting financial goals as a priority.

“The reality is that ignoring personal finances will have consequences whatever stage of life people are in. We all need to take financial responsibility to ensure our personal security for the future. No matter what your current situation, there are always options available to help both manage the day-to-day and prepare for the important moments in life like saving for a holiday, buying a first home, sending children to school or getting ready for retirement,” said Hollyman.

Hollyman and his team of financial planning experts at Eqeus recommend Australians follow five simple tips to help get their personal finances on track for this financial year:

 

TIPS TO HELP GET FINANCES ON TRACK FOR THE NEW FINANCIAL YEAR

Tip 1 – Start with WHY

Before you do anything else, stop and think why you want to make a financial plan. What do you love to do, who are the important people in your life and how will a good plan help you look after these things.

Tip 2 – Set SMART Goals

“I don’t know what to do, so I will do nothing…” Regaining control means working out where you want to go and prioritising this. Set your goals and break these down in to steps to reach these goals. Make them SMART!

Tip 3 – Set a SPENDING Plan (link this to your Goals)

This is not a Budget or a Savings Plan, but it is a Spending Plan that is linked to your unique goals you are trying to achieve (everything has a cost). In this way you provide yourself with permission to spend in the areas that are most important to you. Knowing that in doing this, you will be able to celebrate the goals that you set above.

Tip 4 – TRACK your Plan (Monthly at a Minimum to start with, some do it weekly)

Are you staying on track with your spending plan? If not, why? Where is it going wrong and is this because you are losing control or is it because the goal you set and actual reality don’t match up. If you aren’t tracking this, then without you even realising you may be losing control again.

Tip 5 – CELEBRATE your Achievements

For each goal and for meeting your spending plan, celebrate these achievements as you deserve to, if you have met your goals (just make sure that the celebration isn’t too big that you go back to being out of control again).

 

1 Galaxy Personal Finance Study, April 2015, 1003 respondents.

About

John Hollyman

John’s clients say it is his attention to their story, his ability to lead their journey to discovering wealth and his fundamental desire to get things done that sets him apart from others in his field, while his peers quote trustworthiness, clear strategic thinking and thoroughness that goes above and beyond expectations.

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