Australians experiencing poor physical or mental health will be more likely to experience low financial wellbeing, according to an ANZ survey.
In ANZ’s latest financial wellbeing survey of 3,550 randomly selected Australians, 68 percent were struggling financially also described their mental health as fair or poor, compared to 28 percent overall.
Similarly, 57 percent of Australians struggling financially said they had fair or poor physical health, compared to 27 percent overall.
Professor Elaine Kempson from the University of Bristol defines financial wellbeing as a combination of two factors—how much money you have and what you do with it.
Four-in-five Australians were confident in their ability to manage money day-to-day. Around 37 percent of Australians have more than six months of saved income, but 14 percent reported having no savings at all.
Men were generally found to have higher financial well-being than women, with an average score of 66 and 62, respectively.
The report revealed that health, unemployment, earning potential, and life stage are the most significant socio-economic factors affecting financial wellbeing.
Poor health played the greatest socio-economic impact on financial wellbeing, followed by unemployment.
Meanwhile, those with a stronger savings mindset tended to have higher financial wellbeing, as attitudes towards saving and spending positively correlated with the value of savings and investments held. People with this mindset also tend to have lower levels of consumer debt.
“The survey clearly shows the relatively limited role that financial knowledge plays—financial behaviours are much more important, even on a relatively low income. What you do with your money can make a situation better or worse,” Kempson said.
People in the categories “getting by” and “struggling” were more likely to have used a buy now, pay later (BNPL) scheme, at 33 percent and 41 percent, respectively.
Meanwhile, 8 percent or 1.5 million Australians have used the newer pay-on-demand service, a short-term loan that allows someone to access their pay cheque ahead of time for a fee.
Research by Finder found that most Australians who use this service are Gen Z (22 percent) compared to 11 percent of millennials and 1 percent of baby boomers. Gen Zs are also the most likely to be “extremely stressed” at their financial situations compared to other generations.
“While pay-on-demand services like Beforepay are relatively new, they are essentially just short-term loans and should be treated with the same caution,” Finder personal finance expert Kate Browne said.
“They can be useful for a short period of time … On the flipside, having regular access to your income before payday can lead to poor money habits, such as overspending and being unable to save,” she said.