Australians have a basic understanding of finances, with their own actions mostly determining their financial outcomes. However, when it comes to financial sophistication, the average Australian falls short.
Deloitte and Compare the Market’s financial consciousness index (FCI) report has found the average Australian sits in the ‘middle’, showing a degree of consciousness regarding finance.
Out of a possible score of 100, the average score of those surveyed for the report was 48 out of 100 down three points from last year.
Alarmingly, the study found that 17 per cent of Australians surveyed didn’t know that financial matters and behaviours could or would improve their financial outcomes.
On the opposite end of the spectrum, the report noted that the most financially fluent sector are taking advantage of their knowledge.
This percentage of the population (nine per cent) were considered able to actively follow broader economic policy decisions, such as interest rate changes, and were able to apply such knowledge to gauge the possible impact on their mortgages and investments.
Age matters
Whether you are young or old, you’re typically less financially conscious than those who are middle aged, according to the index.
As you get older, the report cited higher understanding of, and more confidence in the usage of, financial products and services.
Income correlates with consciousness
The amount someone earns also has an impact on an individual’s financial consciousness, according to the index.
The report found that Aussies on less than $100,000 scored nearly 20 points lower than those earning at least $190,000 a year, with scores of 43 and 63 respectively.
While it showed a correlation of wealth with consciousness, Deloitte’s study did reveal that lower income earners are some of the best budgeters because it is a ‘practical necessity’.
A glass half empty
People are relatively less confident compared to last year - both in the short and longer term.
Compared to this time last year, Australians indicated that they were worse off, when considering the perceived change in the value of their homes.
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We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
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