Paul Feeney, co-founder of online financial planning service Map My Plan, says more than a third of Australians are holding precarious levels of savings.
“Thirty-six per cent of working Australians could only access $1,000 or less in the event of a financial shock, such as a medical emergency, without going into debt. Eight per cent could access nothing at all, which is unsurprising given 14 per cent save nothing each month,” Mr Feeney told Nestegg.
The alarming figures came from Map My Plan’s survey of more than 1,500 Australians into the country’s financial health.
“For me, financial fitness is around managing your current cash flow and the ability to absorb a financial shock, through savings or possibility a mix of insurance, [but] our survey shows us that we’re not even close to covering those things,” Mr Feeney said.
The survey scored Australians’ financial health a meagre 113.5 out of a possible 200.
“The most wealth-destructive thing people can do is to go overboard on your credit card and then trying to chase that thing down,” Mr Feeney said.
“It’s quite interesting to see that more than half the people who have credit card debt report they have actually got cash savings. Even though basic mathematics tells you to pay off that credit card, there’s a real reluctance for people to do that.”
Mr Feeney said Australians who want to maintain control of their finances need a financial plan.
“It can be hard to track where your money is going, but once you do you can control your finances and not the other way around,” he said.
“Our research shows that when people have a plan, their financial fitness level increases dramatically.”